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The ITIL 4 Service Value Chain

The Service Value Chain (SVC) is an operational model that underpins the core of ITIL 4, providing a flexible and adaptable approach to creating, delivering, and continuously improving services.


Here, we delve into the essence of the Service Value Chain, exploring its key activities, scope, how itil service value chain, streams, and practical examples to explore its significance in IT service management.


Introduction To The Service Value Chain in ITIL Service Management

The Service Value Chain is a conceptual model designed to facilitate value creation through IT services.


Unlike its predecessor, which was more prescriptive in nature, ITIL 4’s SVC is decidedly more flexible. It offers organisations a versatile framework that can be tailored to their specific needs. It recognises that value is co-created through collaborative efforts between service providers and their customers, shifting the focus towards a more holistic, customer-centric approach to service management.



The Service Value Chain
The Service Value Chain


The Relationship Between the Service Value System (SVS) and Service Value Chain (SVC)


The relationship between the SVC and Service Value System (SVS) in ITIL is that of a core component (SVC) within the overarching system (SVS) designed to facilitate value creation through IT services.


The SVC is an integral part of the SVS, providing a detailed operational model that organisations can apply to manage and improve their services. Meanwhile, the SVS encompasses the SVC and other elements necessary for effective service management, including governance, practices, and continual improvement mechanisms.


In essence, while the SVC provides a specific operational approach to creating and managing services, the SVS provides the broader context in which these activities occur, ensuring a holistic approach to service management that aligns with the organisation's overall strategy and customer needs.


Key Service Value Chain Activities

The SVC comprises six interlinked activities representing the steps necessary to respond to demand and facilitate value creation through services.


These activities are:


  1. Plan: This involves the comprehensive understanding and articulation of vision, strategy, and improvement for all services and products.

  2. Improve: Continuously enhancing the SVC, services, and practices in response to evolving business needs.

  3. Engage: Establishing and nurturing a solid understanding and relationship with stakeholders, ensuring their needs are accurately captured and managed.

  4. Design & Transition: Ensuring that services are designed, developed, and transitioned into the live environment to meet stakeholder expectations.

  5. Obtain/Build: The acquisition or creation of service components required to deliver services.

  6. Deliver & Support: The actual management of services in the live environment ensures they are delivered to agreed specifications and adequately supported.

These activities are not linear but are often undertaken simultaneously or iteratively, allowing agility and responsiveness to changing demands or circumstances.


Scope of the Service Value Chain

The scope of the SVC is expansive, encompassing the entirety of the organisation’s efforts to deliver services. It integrates concepts from across ITIL 4, including the four dimensions of service management, guiding principles, and governance, to provide a comprehensive framework for effective service delivery.


The SVC is not limited to IT services but is applicable to any form of service provision within an organisation, making it a versatile tool in the modern business landscape.



What are Value Streams?

Value streams are a series of steps an organisation undertakes to create and deliver products and services to consumers.


Within the context of the SVC, value streams represent specific combinations of the six activities, tailored to produce a particular service or product.


They are essentially the pathways through which resources are transformed into valuable outputs, guided by the overarching SVC framework.


Service Value Chain Example

To illustrate the SVC in action, consider a software development company aiming to launch a new application.


The value stream might involve:


Plan

The company begins by conducting market research to understand current trends, needs, and gaps in the app market. This involves analysing competitor offerings, potential customer segments, and emerging technologies.


Based on this research, the company outlines a strategic plan for the app, including target demographics, key features, and a roadmap for development and launch. This planning phase is crucial for aligning the project with broader business goals and ensuring resources are allocated efficiently.


Engage

With a strategic plan in place, the company engages with potential users through surveys, focus groups, and social media platforms to gather feedback on the proposed features and usability preferences.


Simultaneously, internal stakeholders (such as marketing, IT, and customer service teams) are consulted to ensure their insights and requirements are incorporated. This engagement ensures that the app development is customer-centric and aligned with internal capabilities and expectations.


Design & Transition The development team begins designing the app's user interface and architecture, prioritising features based on the feedback collected during the engage phase.


Agile development methodologies are employed to allow for iterative testing and refinement of the app. Once the app meets all functional and quality standards, it is transitioned into a live environment, ensuring that all operational and support systems are in place for a smooth launch.


Obtain/Build

Throughout the design and development phases, necessary software components, libraries, and infrastructure (such as servers and databases) are either acquired from third-party vendors or built in-house. This step ensures that the technical foundation of the app is robust, scalable, and capable of supporting the planned features and user base.


Deliver & Support

Upon launch, the company focuses on delivering the app to users through various channels, such as app stores and direct downloads from the company's website. Marketing campaigns are rolled out to promote the app.


Customer support teams are trained and equipped to handle queries and issues, ensuring users have a positive experience. This phase is critical for establishing a strong market presence and building user trust and satisfaction.


Improve

After the launch, the company initiates a continuous cycle of improvement, using user feedback, app performance data, and market developments to refine and enhance the app. This improvement direction may involve adding new features, improving existing functionalities, or addressing any technical issues.


Regular updates are released to keep the app competitive and aligned with user expectations, thereby ensuring continual improvement and sustaining and enhancing its value over time.


Benefits and Challenges of the ITIL 4 Service Value Chain


Benefits


  1. Flexibility and Adaptability: The Service Value Chain (SVC) offers a flexible framework that can be tailored to the specific needs of any organisation, allowing for more adaptive service management practices that can evolve with changing business demands.

  2. Enhanced Customer Focus: By emphasising the co-creation of value with customers, the SVC encourages a more customer-centric approach, leading to higher customer satisfaction and stronger relationships.

  3. Improved Efficiency: The SVC's holistic view of service management helps organisations identify and eliminate inefficiencies across processes, improving overall operational efficiency and reducing waste.

  4. Better Alignment with Business Goals: The SVC framework ensures that all service management activities are aligned with the organisation's broader business objectives, enhancing strategic coherence and effectiveness.


Challenges


  1. Implementation Complexity: Adopting the SVC model can be complex, especially for organisations with deeply ingrained traditional service management practices. Shifting to a more flexible, principles-based approach requires significant cultural and operational adjustments.

  2. Skills and Knowledge Gap: Successfully implementing and leveraging the SVC requires a solid understanding of ITIL 4 principles and practices, which may necessitate extensive training and development for IT and service management teams.

  3. Measuring Success: Defining and measuring success in a flexible and adaptable framework like the SVC can be challenging. Organisations must establish clear, relevant metrics that align with their specific goals and the co-creation of value.

Strategies to Overcome Challenges


  1. Gradual Implementation Start with small, manageable changes and gradually integrate the SVC framework into existing processes. This phased approach helps manage the complexity and allows teams to adapt more easily.

  2. Invest in Training and Development Prioritise training and professional development for staff to bridge the knowledge gap. Consider leveraging external consultants or certified training programs to enhance internal expertise on ITIL 4 and the SVC.

  3. Define Clear Metrics and Goals: Work closely with all stakeholders to define clear, achievable goals and metrics that reflect the value being co-created. Regularly review and adjust these metrics to ensure they remain aligned with business objectives and customer needs.

  4. Foster a Culture of Continuous Improvement: Encourage a culture that sees change as an opportunity for improvement, not a threat. This mindset is crucial for leveraging the full potential of the SVC, enabling organisations to remain agile and responsive to change.


FAQs

What are the six components of the service value chain?

The six components of the Service Value Chain (SVC) in ITIL 4 are:


  1. Plan: Outlines the overall direction for services and management.

  2. Improve: Focuses on enhancing services, practices, and the SVC itself.

  3. Engage: Involves understanding stakeholder needs and establishing relationships.

  4. Design & Transition: Ensures services are effectively designed, developed, and transitioned into live environments.

  5. Obtain/Build: Acquires or constructs the necessary components of services.

  6. Deliver & Support: Manages and supports services in their operational states, ensuring they meet agreed specifications.

These components interact within the SVC framework to facilitate effective service management and delivery.


Which is the best description of the service value chain?


The Service Value Chain is a flexible model at the core of ITIL 4, designed to facilitate the creation, delivery, and continuous improvement of services. It comprises six interconnected activities that represent the steps necessary to respond to demand and facilitate value creation through services.


The SVC enables organisations to adapt and tailor their service management processes to their specific needs, focusing on a holistic, customer-centric approach to creating value.


What is the difference between a service value chain and a value stream?


The Service Value Chain (SVC) is a conceptual model that outlines the key activities necessary for the effective management and delivery of services. It provides a high-level framework that organisations can adapt to their unique contexts. On the other hand, a value stream is a specific sequence of activities within the SVC that combines to create and deliver a particular service or product to customers.


What is the service value system?


The Service Value System (SVS) is an overarching model in ITIL 4 that encompasses every aspect of service management. It includes the Service Value Chain, guiding principles, governance, practices, and continual improvement components.


The SVS provides a comprehensive framework for enabling organisations to ensure that their actions and services consistently co-create value for stakeholders.


Further Reading


 

This article discusses concepts and practices from the ITIL framework, a registered trademark of AXELOS Limited. The information provided here is based on the ITIL version 4 guidelines and is only intended for educational and informational purposes. ITIL is a comprehensive framework for IT service management, and its methodologies and best practices are designed to facilitate the effective and efficient delivery of IT services. For those interested in exploring ITIL further, we recommend consulting the official ITIL publications and resources provided by AXELOS Limited.


About the author: My name is Alan, and I bring over thirty years of experience in the IT industry. My expertise spans IT Governance, Information Security, Project Management, and IT Service Management across diverse organisational styles and market sectors.


I am academically grounded with a degree in Information Systems. I have furthered my professional qualifications with an ITIL Expert certificate, PRINCE2 Practitioner qualification, and CISMP Certification in Information Security Management.


Throughout my career, I've led multi-million-pound change programmes, managed significant government contracts, and accumulated a wealth of practical knowledge and insights, often learned through overcoming challenges in the field.


Comments


About the author

Hi, I'm Alan, and have been working within the IT sector for over 30 years.

For the last 15 years, I've focused on IT Governance, Information Security, Projects and Service Management across various styles of organisations and markets.

I hold a degree in Information Systems, ITIL Expert certificate, PRINCE2 Practitioner and CISMP (Information Security Management).

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