Key Concepts and

Terminologies
 Value
• Perceived benefits, usefulness, and
importance of something.

NOTE : Value is subjective and can change

depending on the context and situation.
 Value…. Contd…
• Value is defined by the customer or end
user

• Value is only perceived when a product

or service is used and appreciated
 Value…. Contd…
• Value can be anything, including the
process, the outcome, or the benefit

• Value can change over time and

circumstances
 Value Co - creation.
• Value co-creation is a key concept in
ITIL 4 that emphasizes on the
importance of collaboration between
customers, organizations, and digital
services to create value.
 Value Co - creation.
• Involvement : Customers are involved in the
planning, design, building, support, and improvement
of services.
• Open dialogue : There is an open dialogue and
active collaboration between the Service provider and
stakeholders.
• Customer perspective : Value is recognized from
the customer's perspective.
• Mutual value: Value is created mutually between
the digital services, organizations, and customers
 Service.
A means of enabling value co-creation by
facilitating outcomes that customers want to
achieve, without the customer having to
manage specific costs and risks.
 Organization.
A person or a group of people that has its
own functions with responsibilities,
authorities, relationships to achieve its
objectives
Service Management.
A set of specialised organisational capabilities
for enabling value for customers in the form of
services
• Developing the specialised organisational capabilities requires
an understanding of:
• Nature of value
• Nature and scope of the stakeholders involved
• How value creation is enabled through services
 Service Provider
A service provider is an
organization that provides IT
services to customers.
 Service Consumer
Service consumer is an entity that
receives a service.

Key message
• When receiving services, an organisation takes on the
role of service consumer
 Service Consumer Contd.
The role of a service consumer can be divided into
three parts:
Sponsor – The role that authorises budget for service
consumption
Customer – The role that defines the requirements for
service and takes responsibility for the outcomes of
service consumption
User – The role that uses a service
 Stake Holder.

Stakeholders are the human component of the

service and are all those that have an interest in
IT services and Organizational Objectives.
 Types of stakeholders.
Stakeholder Example of value for stakeholder

Service Provider Funding provided by the consumer; image improvement;

business development
Service Provider Financial and non-financial incentives; career and
Employees professional development; a sense of purpose
Service Consumer Benefits achieved, costs and risks optimised

Society and Employment; taxes; organisations contribute to the

Community development of the community
Charity Financial and non-financial contributions from other
Organisations organisations
Shareholders Financial benefits, such as dividends; a sense of assurance
and stability
 Products and Services.

Product – A product is a configuration of

resources that an organization creates to be
valuable to customers.
Service – A means of enabling value co-creation
by facilitating outcomes that customers want to
achieve, without the customer having to
manage specific costs and risks.
 Products and Services.
Examples of products include smartphones,
clothing, furniture, cars, and computers.

Examples of services include legal advice,

consulting, healthcare, and transportation.

NOTE : Products can be held, used, or

consumed, while services are experienced or
utilized for a specific purpose or benefit.
 Service Offerings.
A formal description of one or more services, designed
to address the needs of a target consumer group.
A service offering may include goods, access to
resources, and service actions
Key message
Service providers present their services to consumers in
the form of service offerings, which describe one or
more services based on one or more products
 Components of service offerings.
Component Description Examples

Goods Supplied to the consumer • A mobile phone

•Ownership is transferred to the consumer • A physical server
•Consumer takes responsibility for future
use.

Access to Ownership is not transferred to the consumer • Access to a mobile network

resources • Access is granted to the consumer under or to a network storage
agreed terms and conditions
• The consumer can only access the
resources during the agreed consumption
period
Service actions • Performed by the service provider to • User support
address a consumer’s needs • Replacement of a piece of
• Performed according to an agreement with equipment
 Service relationships
• Service relationships are defined as the cooperation between service providers
and service consumers.
• Service relationships are established between two or more organizations to co-
create value.
• In a service relationship, organizations take the roles of service providers or
service consumers.
• A service relationship includes:
• ●Service provision

• ●Service consumption

• ●Service relationship management

 Service relationship management

• These are joint activities performed by service providers and

service consumers to ensure continual value co-creation.

• A training service improves the skills of the consumer’s

employees.

• A broadband service allows the consumer’s computers to

communicate.

• A car-hire service enables the consumer’s staff to visit clients.

• A software development service creates a new application for the

Service relationship model
Output and Outcome

• An output is a • An outcome is a
deliverable form result for a
of an activity stakeholder
enabled by one or
more outputs
Utility and Warranty

• The functionality offered by a • Assurance that a product or

product or service to meet a service will meet agreed on
particular need. requirements. Warranty can be
• The utility can be summarised as summarised as ‘how the service
‘what a service does and can be performs’ and can be used to
used to determine whether a determine whether a service is ‘fit
service is ‘fit for purpose’ for use.
• The warranty typically addresses
availability of a service, capacity,
security and continuity
Utility and Warranty Contd…
Costs and Risk

Cost can be defined as : • A possible event that could cause

The amount of money spent on a harm or loss or make it more
specific activity or resource difficult to achieve objectives.
• It can also be defined as the
uncertainty of outcome and can
be used in the context of
measuring the probability of
positive outcomes as well as
negative outcomes
Costs and Risk

• From a service consumer perspective, • There are two types of risk that are of
there are two types of costs involved in concern to a service consumer:
service relationships:
• Costs are removed from the
• Risks removed from the consumer
consumer by a service (a part of the
by a service (part of the value
value proposition). This may include
costs of staff and technology and
proposition). These may include
other resources failure of a consumers hardware or
lack of staff availability
• Costs imposed on the consumer by
a service (the costs of service
consumption). The total cost of • Risks imposed on a consumer by
consuming a service includes the the service (risks of service
price charged by a provider (if consumption). An example of this
applicable), plus other costs such as would be a service provider ceasing
staff, training and network utilisation to trade or experiencing a security
breach
 Organisational Silos.
• Organizational silos are barriers between
departments or teams within an
organization that can hinder collaboration,
communication, and efficiency.
• Silo mentality can negatively impact a
company's culture and can hamper
efficiency, cross-functional knowledge
transfer, and trust-building.