When it comes to your IT business practices, having the right framework can mean a lot less guesswork, and can save time and money for your organization. This blog explores the importance of the ITIL 4 Service Value System (SVS), which allows businesses and customers to co-create value and achieve organizational goals. Read on to understand how to implement the ITIL 4 SVS using a real-world example.
By Thomas Omedi, HPE; and Darryl Ross, HPE Education Services
For example, a financial institution like a bank does many different things, but the primary role of a retail bank is to take in funds (i.e. deposits) from stakeholders, pool them, and lend them to those who need funds in the form of loans. Banks are essentially intermediaries between depositors and borrowers. So, what would a retail bankโs SVS look like?
Applying the ITIL 4 Service Value System
The key components of the ITIL 4 SVS include:
- Guiding principles
- Governance
- Service value chain
- Practices
- Continual improvement
To better understand how SVS applies to the real world, letโs dig deeper into a retail bank that primarily focuses on banking and loan services for individuals. The consumer need for a loan and the application of the loan itself becomes an opportunity for the bank and creates a value stream, or an opportunity to create and deliver value in the form of products and services. Value is realized when the loan is completely paid. Co-creation of value includes the joint activities the bank and the customer perform to ensure seamless execution of their obligations and feedback loops they create to manage the process.
ITIL 4 identifies seven guiding principles that can be applied to value streams and can be universally leveraged. These include:
- 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
In this example, the bank needs to focus on value and the most suitable products for their customers. The bank can also apply an โoptimize and automateโ principle to drive efficiencies into the value stream itself and make it easier to engage and interact with the consumer. The guiding principles can be applied in many ways to help facilitate the loan value stream for both the customer and the bank.
In terms of governance, banks must adhere to Basel III framework among other requirements. Basel III framework deals with market liquidity risk, stress testing, and capital adequacy in banks. ITIL 4 would identify the three key Governance activities as Define, Evaluate, and Monitor.
Service value chains are composed of supporting activities that help execute the value stream itself and thus value creation. For a bank, service offerings may differ and therefore the value chain activities may also be different. Common activities may include planning activities (Plan), Engage (with external stakeholders), and Design and Transition (products and services). Deliver and Support would deal with the day to day or operational activities, ensuring that incidents, problems, requests, and changes are also addressed in accordance with the agreements to ensure good customer experience and enhance value co-creation.
Practices play a major role in an SVS because they are part of what allows an organization to meet its requirements and the needs of its stakeholders. These practices are more important now more than ever before and are the basis for value co-creation. Some critical practices include, but are not limited to:
- availability
- business continuity
- security
- capacity
- business analysis
- release and deployment
- incident
- request
- change and problem management
Continual improvement is part of the whole process and can also include feedback from customers as well as investing in new technologies and platforms to facilitate the customer experiences that consumers expect. It provides a consistent evaluation and enhancement of the services, practices, and value streams.
For the SVS to function well, the four dimensions of service management model can also be leveraged. Essentially, this model is a mirror of the organization itself. Using the bank as a real-world example:
- The organizations and people dimension would include both internal as well as external stakeholders.
- The Information and technology dimension considers both the information and technologies required, including advancements in AI in the screening and ongoing execution of the plans.
- The bank has an expansive supply chain ecosystem and the partners and suppliersโ dimension would be of key importance.
- Value streams and processes considers the diversity of the various loan types and customer requirements. Banks have standard procedures and supporting value streams as well as tailored or customised processes to suit specific customers or customer groups.
The bottom line
Ultimately, the SVS allows the bank to make profit, create jobs, and build trust in consumers, instilling confidence that their money is protected and secure. For the service consumer, outcomes would include owning a property that has been enabled by a loan, risks mitigated, ability to take another loan if needed, and satisfaction in accomplishing financial objectives.
The SVS can be applied to both service providers and their respective consumer organizations. ITIL describes the SVS as โhow all the components and activities of the organization work together as a system to enable value creation. Each organizationโs SVS has interfaces with other organizations, forming an ecosystem that can facilitate value for those organizations, their customers, and other stakeholders.โ We can see why the SVS is a key model to be leveraged in designing a roadmap to create and provide best-in-class IT services. By adapting and adopting the ITIL 4 framework, consumers and service providers can co-create value together to achieve their goals.
Effective, information-rich training done the right way with HPE Services
Staying competitive in an increasingly fast-paced and complex digital environments means organizations need to constantly adjust how they operate. Businesses need to be more agile and ready to adopt new ways of working to succeed, and staying on top of training is the most cost-effective and efficient way to do so. ITIL training from Education โ HPE Services means that you and your organization get the best in ITIL training from an industry-leader, while also preparing for exams and certifications.
With ITIL training from Education โ HPE Services, youโll be able to:
- Gain in-depth knowledge of the SVS and how it can be used in your organization for effective value co-creation
- Understand the standardized ITIL vocabulary
- Gain insights of how to adapt and adopt the best practices in your organization
- Understand the exam syllabus and prepare for related exams and certification
Learn more about our ITIL 4 certification trainings and register for an ITIL foundations course today!
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