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1 1.1 1.2 1.3

1.3.1 1.3.2

2 2.1

2.1.1 2.2

2.2.1 2.2.2 2.2.3

2.3 2.3.1 2.3.2

2.4 2.4.1

2.5 2.5.1 2.5.2 2.5.3 2.5.4

2.6

3 3.1 3.2 3.3 3.4

3.4.1 3.4.2

3.5 3.6

4

Contents

List of figures

List of tables

Welcome to ITIL 4

About this publication

Introduction IT service management in the modern world About ITIL 4 The structure and benefits of the ITIL 4 framework

The ITIL SVS The four dimensions model

Key concepts of service management Value and value co-creation

Value co-creation Organizations, service providers, service consumers, and other stakeholders

Service providers Service consumers Other stakeholders

Products and services Configuring resources for value creation Service offerings

Service relationships The service relationship model

Value: outcomes, costs, and risks Outcomes Costs Risks Utility and warranty

Summary

The four dimensions of service management Organizations and people Information and technology Partners and suppliers Value streams and processes

Value streams for service management Processes

External factors Summary

The ITIL service value system

4.1 4.2 4.3

4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.3.7 4.3.8

4.4 4.4.1 4.4.2

4.5 4.5.1 4.5.2 4.5.3 4.5.4 4.5.5 4.5.6

4.6 4.6.1 4.6.2

4.7 4.8

5 5.1

5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6 5.1.7 5.1.8 5.1.9 5.1.10 5.1.11 5.1.12 5.1.13 5.1.14

5.2 5.2.1 5.2.2 5.2.3

Service value system overview Opportunity, demand, and value The ITIL guiding principles

Focus on value Start where you are Progress iteratively with feedback Collaborate and promote visibility Think and work holistically Keep it simple and practical Optimize and automate Principle interaction

Governance Governing bodies and governance Governance in the SVS

Service value chain Plan Improve Engage Design and transition Obtain/build Deliver and support

Continual improvement Steps of the continual improvement model Continual improvement and the guiding principles

Practices Summary

ITIL management practices 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

5.2.4 5.2.5 5.2.6 5.2.7 5.2.8 5.2.9 5.2.10 5.2.11 5.2.12 5.2.13 5.2.14 5.2.15 5.2.16 5.2.17

5.3 5.3.1 5.3.2 5.3.3

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

Technical management practices Deployment management Infrastructure and platform management Software development and management

End note: The ITIL story, one year on

Appendix A: Examples of value streams

Further research

Glossary

Acknowledgements

Figure 1.1

Figure 2.1

Figure 2.2

Figure 3.1

Figure 4.1

Figure 4.2

Figure 4.3

Figure 5.1

Figure 5.2

Figure 5.3

Figure 5.4

Figure 5.5

Figure 5.6

Figure 5.7

Figure 5.8

Figure 5.9

Figure 5.10

Figure 5.11

Figure 5.12

Figure 5.13

Figure 5.14

Figure 5.15

Figure 5.16

Figure 5.17

Figure 5.18

Figure 5.19

Figure 5.20

Figure 5.21

Figure 5.22

Figure 5.23

Figure 5.24

Figure 5.25

Figure 5.26

List of figures

The service value system

The service relationship model

Achieving value: outcomes, costs, and risks

The four dimensions of service management

The ITIL service value system

The ITIL service value chain

The continual improvement model

Heat map of the contribution of architecture management to value chain activities

Heat map of the contribution of continual improvement to value chain activities

Heat map of the contribution of information security management to value chain activities

Heat map of the contribution of knowledge management to value chain activities

Heat map of the contribution of measurement and reporting to value chain activities

Heat map of the contribution of organizational change management to value chain activities

Heat map of the contribution of portfolio management to value chain activities

Heat map of the contribution of project management to value chain activities

Heat map of the contribution of relationship management to value chain activities

Heat map of the contribution of risk management to value chain activities

Heat map of the contribution of service financial management to value chain activities

Heat map of the contribution of strategy management to value chain activities

Heat map of the contribution of supplier management to value chain activities

Workforce and talent management activities

Heat map of the contribution of workforce and talent management to value chain activities

Heat map of the contribution of availability management to value chain activities

Heat map of the contribution of business analysis to value chain activities

Heat map of the contribution of capacity and performance management to value chain activities

Heat map of the contribution of change enablement to value chain activities

Heat map of the contribution of incident management to value chain activities

Heat map of the contribution of IT asset management to value chain activities

Heat map of the contribution of monitoring and event management to value chain activities

The phases of problem management

Heat map of the contribution of problem management to value chain activities

Release management in a traditional/waterfall environment

Release management in an Agile/DevOps environment

Figure 5.27

Figure 5.28

Figure 5.29

Figure 5.30

Figure 5.31

Figure 5.32

Figure 5.33

Figure 5.34

Figure 5.35

Figure 5.36

Figure 5.37

Figure 5.38

Figure 5.39

Figure 5.40

Heat map of the contribution of release management to value chain activities

Heat map of the contribution of service catalogue management to value chain activities

Simplified service model for a typical IT service

Heat map of the contribution of service configuration management to value chain activities

Heat map of the contribution of service continuity management to value chain activities

Heat map of the contribution of service design to value chain activities

Heat map of the contribution of the service desk to value chain activities

Heat map of the contribution of service level management to value chain activities

Heat map of the contribution of service request management to value chain activities

Heat map of the contribution of service validation and testing to value chain activities

Heat map of the contribution of deployment management to value chain activities

Heat map of the contribution of infrastructure and platform management to value chain activities

The software lifecycle

Heat map of the contribution of software development and management to value chain activities

Table 2.1

Table 2.2

Table 3.1

Table 4.1

Table 4.2

Table 5.1

Table 5.2

Table 5.3

Table A.1

Table A.2

Table A.3

Table A.4

List of tables

Examples of value for different types of stakeholder

Components of a service offering

Relationships between organizations

Overview of the guiding principles

The steps of the continual improvement model linked to the most relevant ITIL guiding principles

The ITIL management practices

Organizational change management activities

Examples of disaster sources, stakeholders involved, and organizational impact

Examples of value streams for incident resolution

Examples of value streams for software issues

Examples of value streams for creation of an IT service

Examples of value streams for new software development

Welcome to ITIL 4

At this new stage in the development of the IT industry, AXELOS is delighted to present ITIL 4, the latest step in the evolution of IT best practice. By building on our experience and bringing fresh and forward- looking thinking to the marketplace, ITIL 4 equips your business to deal with the challenges currently faced by the industry.

The adoption of ITIL as the most widely used guidance in the world on IT service management (ITSM) will continue with ITIL 4. It ensures continuity with existing ways of working (where service management is already successful) by integrating modern and emerging practices with established and proven know- how. ITIL 4 also provides guidance on these new methods to help individuals and organizations to see their benefits and move towards using them with confidence, focus, and minimal disruption.

ITIL 4’s holistic approach raises the profile of service management in organizations and industries, setting it within a more strategic context. Its focus tends to be on end-to-end product and service management, from demand to value.

ITIL 4 is the result of a great amount of global research and development work across the IT and service management industries; this work has involved active practitioners, trainers, consultants, vendors, technicians, and business customers. The architect team has collaborated with the wider stakeholders and users of ITIL to ensure that the content meets the modern requirements of continuity, innovation, flexibility, and value.

ITIL training provides individuals with a structured approach for developing their competencies in the current and future workplace. The accompanying guidance also helps organizations to take advantage of the new and upcoming technologies, succeed in making their digital transformations, and create value as needed for themselves and their customers.

ITIL Foundation is the beginning of your ITIL 4 journey. It will open your mind to the wider, more advanced guidance provided in the other ITIL publications and training that will support your growth and development. Welcome to the new generation of IT best practice!

Mark Basham CEO AXELOS Global Best Practice

•

•

•

About this publication

ITIL Foundation is the first publication of ITIL 4, the latest evolution of the most widely adopted guidance for ITSM. Its audience ranges from IT and business students taking their first steps in service management to seasoned professionals familiar with earlier versions of ITIL and other sources of industry best practice.

ITIL 4 Foundation will:

provide readers with an understanding of the ITIL 4 service management framework and how it has evolved to adopt modern technologies and ways of working

explain the concepts of the service management framework to support candidates studying for the ITIL 4 Foundation exam

act as a reference guide that practitioners can use in their work, further studies, and professional development.

We hope you will find it useful.

About the ITIL story

The guidance provided in this publication can be adopted and adapted for all types of organization and service.

To show how the concepts of ITIL can be practically applied to an organization’s activities, ITIL Foundation follows the exploits of a fictional company on its ITIL journey.

This company, Axle Car Hire, is undergoing a transformation to modernize its services and improve its customer satisfaction and retention levels, and is using ITIL to do this. In each chapter of the text, the employees of Axle will describe how the company is improving its services, and explain how they are using ITIL best practice to do this.

ITIL storyline sections appear throughout the text, separated by a distinct border.

Axle Car Hire

Axle Car Hire is a global company, with its headquarters based in Seattle. Axle was formed 10 years ago, and currently employs approximately 400 staff across Europe, the US, and Asia-Pacific.

Initially, the company experienced strong growth and consistently high customer satisfaction ratings. For the first six years, repeat business accounted for around 30 per cent of all bookings. Shareholders could expect handsome quarterly dividends. However, over the past four years, the company has experienced a downturn. Customer satisfaction ratings have consistently declined and repeat bookings are rare. Competitors are offering new and innovative options to traditional vehicle hire. Car-pooling, ride-share, and driverless cars are big draws. Customers have also come to expect online and app interfaces as standard for the company’s services.

In this evolving market, Axle Car Hire faces an uncertain future. The board is keen to improve customer satisfaction levels. They want to attract and retain customers, and improve the company’s bottom line. They’ve appointed a new CIO, Henri. Henri was chosen for his experience in digitalized services and his

track record in successful, large-scale IT transformations. He understands the impact of digital service offerings, not only for customer satisfaction levels, but also for employee retention rates.

Henri’s strong background in ITIL and ITSM means that he values ITIL certification, and his hiring policy reflects this. Having worked with Design Thinking, DevOps, and Agile methodologies, he believes sustainable business requires a blended approach to ITSM.

Henri is keen to see how his team can redefine the car-hire experience and ensure that Axle Car Hire is the first choice for new and existing customers.

Meet the Axle employees

Here are four key employees of Axle Car Hire:

Henri Is the new CIO of Axle Car Hire. He is a successful business executive who’s prepared to shake things up. He believes in an integrated approach to ITSM.

Su Is the Axle Car Hire product manager for travel experience, and has worked for Axle for the past five years. Su is smart, meticulous, and passionate about the environment.

Radhika Is the Axle Car Hire IT business analyst, and it is her job to understand the user requirements of Axle Car Hire staff and customers. She is inquisitive and energetic, and strives to maintain a positive relationship with all her customers, both internal and external. Radhika works mostly on discovery and planning activities, rather than in IT operations. She asks a lot of questions and is great at spotting patterns and trends. Marco Is the Axle Car Hire IT delivery manager. He is process-driven and continually references the ITIL framework to help him manage positive service relationships. However, Marco has had little exposure to a blended or collaborative approach to service management.

CHAPTER 1

INTRODUCTION

1 Introduction

1.1 IT service management in the modern world According to the World Trade Organization,1 services comprise the largest and most dynamic component of both developed and developing economies. Services are the main way that organizations create value for themselves and their customers. Almost all services today are IT-enabled, which means there is tremendous benefit for organizations in creating, expanding, and improving their IT service management capability.

Technology is advancing faster today than ever before. Developments such as cloud computing, infrastructure as a service (IaaS), machine learning, and blockchain have opened fresh opportunities for value creation, and led to IT becoming an important business driver and source of competitive advantage. In turn, this positions IT service management as a key strategic capability.

To ensure that they remain relevant and successful, many organizations are embarking on major transformational programmes to exploit these opportunities. While these transformations are often referred to as ‘digital’, they are about more than technology. They are an evolution in the way organizations work, so that they can flourish in the face of significant and ongoing change. Organizations must balance the need for stability and predictability with the rising need for operational agility and increased velocity. Information and technology are becoming more thoroughly integrated with other organizational capabilities, silos are breaking down, and cross-functional teams are being utilized more widely. Service management is changing to address and support this organizational shift and ensure opportunities from new technologies, and new ways of working, are maximized.

Service management is evolving, and so is ITIL, the most widely adopted guidance on IT service management (ITSM) in the world.

1.2 About ITIL 4 ITIL has led the ITSM industry with guidance, training, and certification programmes for more than 30 years. ITIL 4 brings ITIL up to date by re-shaping much of the established ITSM practices in the wider context of customer experience, value streams, and digital transformation, as well as embracing new ways of working, such as Lean, Agile, and DevOps.

ITIL 4 provides the guidance organizations need to address new service management challenges and utilize the potential of modern technology. It is designed to ensure a flexible, coordinated and integrated system for the effective governance and management of IT-enabled services.

1.3 The structure and benefits of the ITIL 4 framework The key components of the ITIL 4 framework are the ITIL service value system (SVS) and the four dimensions model.

• • • • •

1.3.1 The ITIL SVS The ITIL SVS represents how the various components and activities of the organization work together to facilitate value creation through IT-enabled services. These can be combined in a flexible way, which requires integration and coordination to keep the organization consistent. The ITIL SVS facilitates this integration and coordination and provides a strong, unified, value-focused direction for the organization. The structure of the ITIL SVS is shown in Figure 1.1, and is repeated in Chapter 4, where it is described in more detail.

The core components of the ITIL SVS are:

the ITIL service value chain the ITIL practices the ITIL guiding principles governance continual improvement.

The ITIL service value chain provides an operating model for the creation, delivery, and continual improvement of services. It is a flexible model that defines six key activities that can be combined in many ways, forming multiple value streams. The service value chain is flexible enough to be adapted to multiple approaches, including DevOps and centralized IT, to address the need for multimodal service management. The adaptability of the value chain enables organizations to react to changing demands from their stakeholders in the most effective and efficient ways.

The flexibility of the service value chain is further enhanced by the ITIL practices. Each ITIL practice supports multiple service value chain activities, providing a comprehensive and versatile toolset for ITSM practitioners.

Figure 1.1 The service value system

The ITIL guiding principles can be used to guide an organization’s decisions and actions and ensure a shared understanding and common approach to service management across the organization. The ITIL guiding principles create the foundation for an organization’s culture and behaviour from strategic decision-making to day-to-day operations.

The ITIL SVS also includes governance activities that enable organizations to continually align their operations with the strategic direction set by the governing body.

Every component of the ITIL SVS is supported by continual improvement. ITIL provides organizations with a simple and practical improvement model to maintain their resilience and agility in a constantly

• • • •

changing environment.

1.3.2 The four dimensions model To ensure a holistic approach to service management, ITIL 4 outlines four dimensions of service management, from which each component of the SVS should be considered. The four dimensions are:

organizations and people information and technology partners and suppliers value streams and processes.

By giving each of the four dimensions an appropriate amount of focus, an organization ensures its SVS remains balanced and effective. The four dimensions are described in Chapter 3.

The ITIL story: The CIO’s vision for Axle

Henri: These days, the pace of industry change is rapid, with the term ‘Fourth Industrial Revolution’ now widely used. Companies such as Axle are competing with disruptors that include driverless cars and car share.

Service expectations have changed since Axle was created 10 years ago. Customers want immediate access to services via apps and online services. Axle’s booking app is out of date, and our technology isn’t keeping pace with changes in our service offerings.

My vision for Axle is that we become the most recognized car-hire brand in the world. We’ll continue to offer outstanding customer service while maintaining competitive car-hire rates. After all, Axle is now about more than just hiring a vehicle. We must focus on our customers’ whole travel experience.I

Footnote: 1 https://www.wto.org/english/tratop_e/serv_e/serv_e.htm [accessed: 22 July 2019].

CHAPTER 2

KEY CONCEPTS OF SERVICE MANAGEMENT

• • • • •

• • •

2 Key concepts of service management A shared understanding of the key concepts and terminology of ITIL by organizations and individuals is critical to the effective use of this guidance to address real-world service management challenges. To that end, this chapter explains some of the most important concepts of service management, including:

the nature of value and value co-creation organizations, service providers, service consumers, and other stakeholders products and services service relationships value: outcomes, costs, and risks.

These concepts apply to all organizations and services, regardless of their nature and underpinning technology. But the first thing that must be outlined is the most fundamental question of all: What is ‘service management’?

Definition: Service management

A set of specialized organizational capabilities for enabling value for customers in the form of services.

Developing the specialized organizational capabilities mentioned in the definition requires an understanding of:

the nature of value the nature and scope of the stakeholders involved how value creation is enabled through services.

The ITIL story: Axle’s services

Su: At Axle, our service is travel experience. We provide this service to our customers to create value both for them and for Axle. Service management helps us to realize this value.

The ITIL story: Axle’s customers

Here are three of Axle Car Hire’s frequent customers, whom you will meet as the story unfolds:

Ichika Is a university student on holiday with no fixed plans. She hopes to visit music festivals as part of her travel experience. Apart from that, her travel is flexible. She is tech-savvy and quickly adapts to new applications and solutions. She is interested in trying new and exciting digital services.

Faruq Is recently retired and typically holidays alone. He is thoughtful and enjoys learning about

and adopting new technology. Faruq often makes his travel plans on the go, as his needs can change, based on personal or health considerations.

Amelia Is the facilities manager at an organic food distribution company called Food for Fuel. Their head office is in central London, but many Food for Fuel consumers are in regional areas. This means access by public transport is typically infrequent, unreliable, and expensive. Consequently, Food for Fuel provides its sales staff with vehicles to enable them to conveniently and reliably visit existing and potential customers.

2.1 Value and value co-creation

Key message

The purpose of an organization is to create value for stakeholders.

The term ‘value’ is used regularly in service management, and it is a key focus of ITIL 4; it must therefore be clearly defined.

Definition: Value

The perceived benefits, usefulness, and importance of something.

Inherent in this definition is the understanding that value is subject to the perception of the stakeholders, whether they be the customers or consumers of a service, or part of the service provider organization(s). Value can be subjective.

2.1.1 Value co-creation There was a time when organizations self-identifying as ‘service providers’ saw their role as delivering value to their customers in much the same way that a package is delivered to a building by a delivery company. This view treated the relationship between the service provider and the service consumer as mono-directional and distant. The provider delivers the service and the consumer receives value; the consumer plays no role in the creation of value for themselves. This fails to take into consideration the highly complex and interdependent service relationships that exist in reality.

Increasingly, organizations recognize that value is co-created through an active collaboration between providers and consumers, as well as other organizations that are part of the relevant service relationships. Providers should no longer attempt to work in isolation to define what will be of value to their customers and users, but actively seek to establish mutually beneficial, interactive relationships with their consumers, empowering them to be creative collaborators in the service value chain. Stakeholders across the service value chain contribute to the definition of requirements, the design of service solutions

and even to the service creation and/or provisioning itself (see section 4.5).

The ITIL story: Value

Marco: We’re planning to release a generous new offering, giving an extra day of car hire with every booking.

Henri: However, we must remember that value means different things for different people. Axle has a broad range of customers, and each of them has their own requirements for car hire. We need to make sure that any changes to our services are actually providing some type of value to our customers. Ichika: To me, ‘value’ means freedom of movement. I want my travel to be easy, hassle-free, and flexible. I opt in to mailing lists and subscriptions when it suits me. I take frequent short trips and rarely visit the same location twice. An extra day of car hire won’t always suit my plans. Faruq: I don’t travel often, so I don’t have my own car. The value of a car

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