The ITIL Service Value Chain

A practical guide for service desk technicians, IT support colleagues, and ITSM specialists

ITIL 4, the latest version of our favorite ITSM best practice framework, has been out since
2019. A new version of ITIL is always big news in the ITSM community, and one of the biggest topics of discussion was around its service value chain. This article will examine the role of the service value chain, how it supports ITIL practices, and how to use it effectively to deliver business outcomes.

The Service Value Chain Explained

So, what is the service value chain (SVC)? The service value chain is an operating model that lists the activities necessary to create value with a product or service. Whereas ITIL v3 focused on the service lifecycle of strategy, design, transition, operation, and continual improvement, ITIL 4 does it differently. The service value chain is a core part of ITIL 4 and facilitates value co-creation. It is the central part of the overall service value system (SVS) and acts as a conduit for actioning service transformation and delivery. It represents how all an organization's components and activities work together to create value.

Service Value Chain Diagram

Source: Diagram 4.2 Chapter 4 ITIL Foundation ITIL 4 Edition

The service value chain comprises of activities that a company takes in the creation of value:

Plan - all planning activities. This stage of the service value chain is responsible for creating a shared understanding of the vision, status, and improvement activities for the four dimensions and all products and services.
Engage - this set of activities looks after all interactions with people, colleagues, end users, customers, management, and partners.
Design and transition - the analysis and development of new services. This stage looks after all activities to ensure that services and products continually meet stakeholder expectations for cost, quality, and time to market.
Obtain/Build - this part of the service value chain ensures that service components are available when needed and meet agreed specifications.
Deliver and support - ensures services are delivered and supported according to agreed specifications and service level agreements (SLAs). This part of the service value chain looks after service delivery and support.
Improve - ensuring continual improvement of services, products, and practices across all value chain activities and the four dimensions.

Why is the Service Value Chain Needed?

Previous versions of ITIL were quite structured and linear. ITIL v3, for example, represented service delivery as a series of defined steps. First, we had the strategy stage to understand demand and finances and create a plan. Next was the design stage, which made the service blueprint. This was followed by transition, which released the new service to end users, and operations, which dealt with day-to-day support. The final stage was continual service improvement (CSI), which looked at improving service delivery over time. With the
exception of CSI, most people saw the ITIL v3 service lifecycle as quite linear - it assumed that transformation only went one way from strategy to operations and CSI, but no one told the rest of the world that! The real world isn't structured or linear; people change their minds, go back and forth, or introduce new requirements as things change and evolve. In ITIL 4, the service value chain is a way of adapting to this, and by supporting agility and structure, the service value chain enables IT departments to understand better, plan, and manage the activities required to create value through their services, leading to better, faster, safer service delivery and improved customer experience.

Putting theory into practice:

Some example outputs from the service value chain include:

Service Value Chain Activity	Real Life Output
Plan	Strategic, tactical, and operational plans A product and service portfolio Architecture documentation Contract agreements for external partners Policies and procedures Continual improvement opportunities
Engage	Demand, opportunities, and patterns of business behavior Requirements that will feed into design and transition activities An initial list of support tasks for deliver and support activities Customer and stakeholder requirements Project support documentation Contracts, SLAs, and experience level agreements (XLAs) for support teams and third-party partners Service performance reports for customers Third-party service component information
Design & Transition	Requirements and specifications New and changed products and services. Performance information and improvement opportunities, New and changed services and product information to all value chain activities.
Obtain / Build	Contract and agreement requirements. Service components. Performance information and improvement opportunities for continual improvement activities. New and changed service component information to all value chain activities.
Deliver & Support	Services delivered to customers and users. Support documentation. Product and service performance information. Change requests for further service enhancements. Improvement opportunities
Improve	Improvement initiatives. Improvement status reports for all value chain activities. An updated continual improvement register.

Real-life example:

Service Value Chain Activity	Real Life Output
Plan	An end-user experiences an issue with a service.
Engage	They contact the service desk for help. Depending on the organization, this could be done via phone, email, web chat, artificial intelligence (AI), or self-service. The service desk will engage with that end user and raise an incident.
Deliver & Support	The service desk triages the issue, but it cannot be resolved at the first line of contact, so it is escalated to the next tier of support. Further investigation finds that the issue needs a code fix, so the incident is updated with interim support advice and workarounds if available so the service desk can update the end user.
Engage	The service desk contacts the end user to provide them with an update and advise on any workarounds, if available.
Design & Transition	The support teams involved work to design and transition a code fix, ensuring that it is for purpose and can be safely integrated into the existing service ecosystem. The service desk is advised of an expected release date so the affected user can be aware.
Engage	The end user is updated by the service desk so that they know when to expect a permanent resolution.
Obtain / Build	The code fix is built and tested at a component level.
Deliver & Support	The code is delivered to the live environment, and early life support practices are engaged.
Engage	The service desk contacts the end user to confirm everything should be. Once the issue is resolved, the service desk issues a customer satisfaction feedback request.
Improve	Feedback from the customer satisfaction request is added to the continual improvement register.
Plan	The continual improvement register helps form the plan for future code fixes.

Service Value Chain Benefits

Customer centricity. The service value chain prioritizes understanding and meeting stakeholder needs. By leaning into the service value chain, you're committing to aligning services to business requirements and improving customer experience.
Value delivery. Previous versions of ITIL discussed value, but it always felt a bit nebulous. We'd refer to it in terms of utility and warranty, but what does that mean to the end user?
By using the service value chain, we are putting a structure in place to ensure services are designed, developed, and delivered in a way that maximizes their value and supports the needs of the business.
Improved service delivery. The service value chain streamlines service delivery processes by identifying and optimizing interdependent activities. It removes duplication, minimizes errors, and enhances effectiveness and efficiency.
More proactive and flexible IT service delivery. The service value chain embeds a culture of continuous improvement within organizations. It encourages regular reviews of services, processes, and performance and ensures that improvement ideas are documented, prioritized, and acted on.
Alignment with business deliverables. The service value chain ensures that IT services are aligned with the organization's overall business objectives. By linking service delivery to strategic goals, organizations can prioritize assets, resources, and work streams to support business outcomes effectively.
A more transparent approach to service management. The service value chain provides a
holistic view of the service lifecycle, promoting integration and collaboration across different stages and practices. This leads to improved collaboration, better communication, and better service outcomes.

Final thoughts

The SVC helps IT departments collectively level up service support and delivery offerings. It gives support teams an operating model to plan, design, deliver, support, improve services, and engage with the end-user community. Used effectively, the SVC can drive closer alignment to the business, deliver service outcomes, and strengthen #CX. What's not to love?

About the author

Vawns is an Irish mum of 3 and is an experienced and award-winning Service Management professional. Long history as an ITSM architect, consultant and evangelist. itSMF UK board member. Member of the itSMF Ireland Management Committee, author of itSMF UK collateral on Service Transition, Software Asset Management and Problem Management. Reviewer for the Service Transition ITIL 3 2011 publication. Winner of the itSMF UK 2016 thought leadership award. Founding member and in house blogger for the ITSM.Tools website.

Vawns is a Principal Consultant at i3Works Limited and blogs for ITSM.Tools and the itSMF UK. When she's not working or running around after her children, Vawns can be found at the Madejski stadium supporting the mighty Reading FC, failing at the Couch to 5 K or drinking too much coffee.

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