Four Dimensions of Service Management
This is a guide on the four dimensions of service management.
The Service Value System
The ITIL service value system 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, and this requires integration and coordination to keep your organization consistent. The components of ITIL's value system are as follows. First up, we're going to look at the guiding principles. They are focused on value. Start where you are, progress iteratively with feedback, collaborate and promote visibility, think and work holistically, keep it simple and practical, and optimize and automate.
Next up, although we don't show too much of it in this particular course, is governance. You'll have to wait for the further ITIL courses for that. Where organizational governance is going to evaluate what the organization needs. It's going to direct and then monitor any outcomes of that governance.
Next up, we have the core of ITIL service value system. And we'll look later on at the service value chain. The service value chain plan and improve and gauge, design and transition, obtain and build, deliver and support. ITIL has replaced its processes with practices. And what you'll see later on are some of the practices. We've got 14 general management practices, 17 service management, and three technical management practices.
Luckily, we don't have to learn about all 34. And then finally, down there at the bottom, we've got continual improvement, which has been a theme of ITIL right the way from version one all the way through to ITIL 4 now. You'll notice that what I haven't done is actually mention the two circles on the outside.
And the input to our system is either opportunity or demand. Opportunity new stuff, things that the organization might need in IT services to make it more competitive, to help it use its resources better. Demand is demand for services that we've already got in place. So our input is going to come from opportunity and demand. And hopefully, our outputs and our outcomes are going to help to deliver value and facilitate the co-creation of value with our customers and our users.
The Four Dimensions of Service Management
ITIL uses these four dimensions to ensure that it takes an holistic approach to service management. The four areas that we'll look at will be organizations and people, information and technology, partners and suppliers, and value streams and processes. As you'll also see from this diagram, their value is absolutely at the core of what ITIL believes in, and is at the core of the four dimensions of service management.
And that value is facilitated through products and services, which we'll take a closer look at further on through the course. You'll also see around the outside some limiting factors or constraints those political factors, economic factors, social, technological, legal, and environmental factors. The smart ones amongst you will have probably noticed that they're the PESTLE that comes from the business analysis environment.
So we'll also take a quick look at those as we go through the course. Four dimensions of service management incredibly important to make sure that we've got a holistic view of service management.
Key Concepts of Service Management
First thing we've got to do if we're looking at service management, is actually define what we mean by service management.
[Video description begins] The screen displays a heading titled: Key concepts of service management. It contains a bullet point that defines service management. This bullet point contains five sub bullet points. [Video description ends]
And ITILs definition here is a set of specialized organizational capabilities for enabling value for customers in the form of services. Now, the interesting word in that is the word capabilities, which used to have a meaning in ITIL back at version 3. ITIL4, the word capabilities, now it's just the Oxford English Dictionary version of the word, rather than having a specific meaning within ITIL.
And what we're going to look at in this initial key concepts of service management stage, is going to be the nature of value and value creation, as we've already mentioned. That's right at the very center of everything that ITIL is designed in service management is designed to do. We're going to look at stakeholders, organizations, service providers, service consumers, customers, and so on.
We're going to look at products and services, and the difference between the two. We're going to look at the nature of service relationships and how service relationships are central to delivering end-to-end services in an organization. And finally, we're going to look at the positive and negative effects of outcomes, costs, and risks on value created and value co-created within the organization.
The Nature of Value and Value Co-Creation
So it makes sense that at this point, we look at the term value and what we use it regularly within service management and ITIL, so let's look and see what it means. Value is perceived benefits, usefulness, or importance of something. So value can be a perceived benefit. Let's say, for example, we go out and we buy a water bottle for taking on water when we're out training, we're out jogging, we're at the gym, and it's got Mercedes or Porsche or Ferrari written on it. Then we perceive there's a certain value from that name that our other goods and services where the value is way, way more obvious.
An IT example could be a single sign on to get you into multiple sites at the same time where obviously the benefit is very, very important or the use of home shopping where you can just you can sit in bed on a Saturday morning and do your shopping from the comforts of your own bed and your own bedroom. So value, perceived benefits, usefulness, and importance. Now ITIL also talks about value being co-created through active collaboration between providers, consumers, and their organizations.
A very, very good example of this is the Lego corporation, the bricks we all our children or we used to play with as children. Even I can remember back that far playing with playing with LEGO. One of the things that LEGO does is it submits it allows people to submit ideas for new models.
Now the co-creation there is if somebody submits an idea for a model and Lego takes that up, then that person who submitted the idea, they share in some of the benefits, financial usually, of that. LEGO obviously get the benefit of it being a best-selling model as do the children and the people who buy the LEGO to actually use. So value has been co-created between them all.
Stakeholders
So in service management, there are many different kinds of stakeholders, and each of them
[Video description begins] The screen displays a heading titled: Stakeholders. It contains six bullet points, namely: Organization, Service providers, Service consumers, Customer, User, and Sponsor. [Video description ends]
has got to be understood in the form of the way that value is created for each of them. So we can see here, we've got six different stakeholders and we're going to look first at the bottom three, probably the ones that people are far more familiar with, the concepts of customer, and user, and sponsor. So the customer, the person who defines the requirements for a service and takes responsibilities for the outcomes of the service consumption. That can differ sometimes from the sponsor, who's the person who actually signs the checks and authorizes the budget for service consumption. Sometimes they're different people, sometimes it's the same person.
And the user is the person who actually uses the service and takes the service and hopefully delivers value for them. A very non-IT example is dog food. So for example, I go to my local supermarket and I see a big tin of Bouncy Chunks dog food. It cost $2.
As a customer and as a sponsor view, I think, what a bargain. I take it home, I put it in the bowl, and Fido goes, oh no, not that again. The users view is completely different. So you've got to understand different perspectives. OK, slightly abstract, but nonetheless, a real example of the difference between a customer, a user, and a sponsor view.
The three at the top, firstly, we talk about an organization, a person unlikely that it's going to be a person a group of people that have got their own functions with responsibilities, authorities, relationships in order to achieve its objectives.
Normally, this organization is going to be some sort of corporation, or it's going to be government, or it's going to be charity. It's going to be one of those sectors where the organization is there to fulfill actual goals. Service providers is, when provisioning services, an organization can take on the role of a service provider.
So an internal IT department can be a service provider, but they can also be external service providers to the customer organization. Or they could actually be a mix of the two, so the service providers can be both internal and external. The chances are that most of your organizations are using a mix of the two, internal and external service providers.
The final one is the service consumer. So when receiving services, an organization takes on the role of the service consumer, and this is designed for us to understand that each organization may very well be a service provider to multiple organizations, as well as a service consumer to multiple organizations as well.
So understanding the relationships between the various services is going to be massively important, as is the perspectives of how each of those groups receives value.
Products and Services
The definition of a service is 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. So let's take, for example, if I go on vacation or holiday, then the value that I get from the holiday is hopefully a relaxing time where I enjoy myself. And the value without the costs and risks, I don't have to worry about is the aircraft being maintained, is the hotel safe, and so on.
I just go away and enjoy my holiday or vacation. A product a configuration of an organization's resources designed to offer value for the customer. So if we think about our vacation example again, if I go on vacation, now when I go onto a website of an organization that offers vacations, I've got different products. I've got insurance products. I've got products for ground transportation. I've got products for car hire.
I've got products for the type of hotel, the type of board that I want to have at that particular hotel, whether it be just an all-inclusive holiday or vacation. So I've got lots of different products. And finally, a service offering, that's the description of one or more of those services designed to address the target consumer group. A service offering may include goods, access to resources, and service actions. And we're going to look at those separately next.
Components of a Service
Now important exam tip here for you. When we do ask questions in the examination about definitions, they are always going to be word for word. So the definitions that you learn in this particular section of the course, it's very important that you commit them as much as you possibly can to memory for the exam. So we talked about a service offering. And a service has got three different components goods, access to resources, and service actions. So if we look firstly at goods, this is where ownership is transferred to the consumer.
And the consumer takes responsibility for future use. Now, if I use my vacation example again, it's actually when you look at a lot of services now. The goods that actually transferred to the owner are quite rare particularly with IT services as we use so much as a service. But thinking about that vacation example, if it's a special vacation and you've decided to order the champagne and chocolates for the hotel room when you get to your destination, then you almost certainly will take ownership of those particular goods for the rest of your vacation.
It probably won't last for the rest of your vacation, but that's great. Access to resources. Ownership is not transferred to the consumer. Access is granted and licensed under agreed terms and conditions. Using my holiday example, if I've hired a car at the far end, then when I get to my location and I go to the car hire and the car rental booth and I pick up the car, they're granting me access to the resources.
I can't just drive away with the car and then go and sell it. Well, I could, but it's a felony, and I'd probably end up being arrested. So access to resources is what you're granted. And finally, service actions, they are performed by the provider to address consumer need. And they're preformed according to agreement with the consumer.
Again, if I think about hiring a car rental, they'll give you a number to ring if you've got issues. That's a service action. They'll give you a return location and what to do for that. That's a service action. So we've got the three components of a service. Important that we remember all three of those components. That's goods, access to resources, and service actions.
Service Relationships
An organization's resources can be pulled together to deliver products. Products can deliver goods, deliver access to resources, and have service actions associated with them that will provide a service offering. The service offering to the customer can then be managed through a service relationship.
[Video description begins] The screen displays a heading titled: Service relationship. It contains four bullet points. The first bullet point defines Service relationship. The next three bullet points are labelled as: Service provision, Service consumption, and Service relationship management. [Video description ends]
So what's a service relationship, you might ask. Service relationship is the cooperation between a service provider and the consumer. We can't just offer services, and people will use them. This isn't Field of Dreams. What we have to do is make sure that we've got particular components in place.
The first one was service provision, which was the, as we've seen, are the actions performed by an organization to actually provide the services. The second one, service consumption, that's the activities performed by an organization to consume the services.
So put very, very simply, you have to pay before you can consume the services. So there is an action performed by the organization before it consumes services. It pays first. It pays up front. Sometimes it pays afterwards. But it needs to agree to pay for the services. And finally, making sure that those services are being delivered, and the value is being co-created. We've got service relationship management joint activity performed by both the service provider be they internal or external and the service consumer to ensure that you've got this continual value co-creation going on based on agreed and available service offerings.
So very often, you're looking at the service offering, perhaps in a service level agreement. This is the level of service. This is the level of functionality. So yeah, if you pay for your ticket for the airline, there's a service consumption and a consumer responsibility.
Then the airline will get you there safely, and hopefully, it will get you there on time. So there's agreed and available service offerings where there's a relationship between you and the organization. That relationship's interesting nowadays that quite often, you can have a service relationship with an organization without actually speaking to anybody at that organization, and that's a really interesting concept for service and service management to cope with.
The Service Relationship Model
And as you can see, there are four organizations that have got service relationships here between themselves. Now one of the things about this service relationship model is the fact that each organization has got to act both as a service consumer in managing a relationship but also acts as a service provider in terms of managing the relationship. And I don't think really there's any organization that won't be in that position. Now if we look within each of the circles, what we do is we obtain and configure products and services. We then offer and we provide those products and services to our customers.
Let me give you an example to illustrate it. So let's say organization A here is AWS. And what AWS do is they provide modules that we can incorporate as Global Knowledge into our training courses. So they've offered US goods and services, provided them to us. What we've done is obtained we've configured them into a training course. We then offer that training course to a bank. And the bank uses the skills that we've given them in AWS and so on, and what they do is it enables them to build a cloud-based credit checking service that they can then offer to other organizations.
That then is obtained and configured, let's say buy a retail organization, and they're doing credit check in use in the bank. So what you've got, as you can see, in here, we've got all of our service relationships. So remember with the service relationship model as an organization, you've both got to be service provider and consumer of the service in terms of how you manage relationships.
Outcomes, Costs, and Risks
That's only half of the story of value. Value can also affect other outcomes. Services can introduce costs. New services can introduce new risks. So let's take home shopping as an example and the value of home shopping. Many people, it supports their outcomes. They get the product that they want. If I want to buy a new suit, I want to look sharp at a particular event and out to impress people. The outcome I want is that people like me and what I've got to say. Then that new suit that I bought online might support those outcomes.
It removed the cost of me spending half a day going round various tailors, making sure that I've got the making sure that I found the suit that I like. And the risk of me going out for half a day and not actually finding anything is being removed by home shopping giving me access to all of that through a few clicks on my laptop or my PC.
But it does affect outcomes. I actually enjoy going shopping every so often, so that's certainly an outcome that's been affected. I enjoy walking round, looking into stores. Costs can be introduced. It could be the cost of me having to wait in for a package.
It could be the cost of me having to send it back if it doesn't fit properly. And of course, the risk that when it arrives, well, it didn't look like that in the picture when I bought it. So costs and risks have got to be balanced out. Whenever we bring in a new service, not just looking at the benefits but also the risks that are introduced the extra costs that are introduced.
And of course, if we look at it from a service provider's viewpoint, then the tailor who provides the suit, then certainly, they're going to have some it's going to be a lot cheaper for them to sell me a suit or some clothing through the internet and through their home shopping than it is to employ tailors in the store.
However, it's also going to mean that their stores might actually become uncompetitive. And we've seen in a lot of parts of the world the effects on high street shopping, and people go into shopping malls. It's being hard by the advent of internet shopping. So we've always got to make sure that we balance out the in value. We balance out the costs, the risks, and the outcomes that are supported.
Output vs. Outcomes
So now we're going to take a look at outcomes, costs, and risks in a little bit more detail.
[Video description begins] The screen displays a heading titled: Output vs. outcomes. It contains two bullet points. [Video description ends]
First, outcomes. We must distinguish between an output of a service and an outcome from a service. Probably the simplest IT one is an output from an output from a service might be a report. The outcome might be good decision was made because of the information in the report. I think there's a lovely example in the ITIL books that talk about the output of a wedding photography service being an album of artfully arranged photos of the wedding.
Whereas the outcome is the ability to remember that precious day in your life, and also the ability to bore your friends senseless when they come to your house and you show them your wedding photos for the 14th time.
Types of Cost
So now let's look at cost, he amount of money spent on a specific activity or resource. From the service consumer's perspective, there are two types of costs involved in service relationships. The first are costs removed from the consumer by the service. So let's take cloud for example infrastructure as a service, as an example. So it might be that's not having to support servers and operating systems.
That might include removing costs, might include the cost of staff, of technology, and other resources that as the consumer you now don't have to provide. But there are also going to be costs that are imposed in using cloud and the provision of cloud. And they'll be things like the actual price charged by this cloud service provider.
There'll be other costs like staff training, the cost of network utilization, procurement, and other costs. The two must always be balanced out when making a decision that you absolutely understand the costs removed by taking the service, but equally you absolutely understand any new costs that are going to be imposed.
Types of Risk
The third and final component of value is risk.
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And risk there is defined as a possible event that could cause harm or loss or make it more difficult to achieve objectives. Risk can also be defined as uncertainty of outcome and can be used in the context of measuring the probability of positive outcomes, as well as negative ones. From our perspective of value, we've got to look at risks removed and risks imposed. So let's take our cloud example and going infrastructure as a service. It might well be that the risks removed from a consumer by this service would be things like your server hardware failing internally, lack of staff availability. It could be anything to do with your security has been removed by taking the service.
However, we've always got to balance out on the other side of the equation, risks imposed on the consumer by the service. And, for example, quite obviously is a risk of your third-party provider ceasing to trade, which would be a massive, massive risk and also the risks of not necessarily understanding where your data is being held and the risk is imposed. You could be actually asking, both literally and metaphorically, where on earth is my data.
Utility vs. Warranty
The final way to look at a service and the value of that service is does it meet utility and warranty criteria?
[Video description begins] The screen displays a heading titled: Utility vs. warranty. It contains two bullet points. [Video description ends]
So what's utility? Utility is the functionality offered by a product or service to meet a particular need. To have utility, the service must either support the consumer and/or remove constraints from that consumer. So it could be that a single logon, for example, removes the constraint of having to log onto many and various different systems. So utility is all about what the service does or is it fit for purpose? Warranty is more about how the service performs or its fitness for use, so that's assurance that the product or service is going to meet agreed requirements. Usually, that's going to be in an SLA or a contract.
Warranty often refer to those service levels that have been aligned to the needs of the consumers. Now to give you an example, I might have a service that's an online shopping service. Again, it's absolutely superb. It does everything I want it to do. It's got all of the utility, all the functionality that I need. It makes sure that's all the people who bought one particular type of product, oh, wow, it's great. It tells me that there's another type of product that I need to buy from this.
So the utility is absolutely superb. But from a warranty perspective, if I log onto the website when it's busy, it runs really, really slowly. Quite often, the website isn't actually available, and so the online shopping isn't available. And when I put my financial details in there, it emails them to 3/4 of North America at the same time, so it's not particularly secure. So from a utility and warranty perspective, I'm only getting half the value.
So there's always going to be a balance between utility and warranty the amounts of functionality that's needed against the amount of warranty that's needed. And different consumers and different stakeholders remember we talked about them before will have different views.
And I give you an example of my 16-year-old daughter's sorry, 17-year-old. Sorry, Katherine my 17-year-old. My 17-year-old daughter's cell phone most of her value from that cell phone is about the utility, the functionality. Can I get Instagram and Facebook and so on?
For me, as the sponsor and the person paying for that, then for me, it's absolutely about things like security and availability and being able to make sure that what she can do. So value is perceived by me, as the sponsor, and my daughter, as the consumer or user, in a very, very different way.
Stakeholders and Value
What we've got here is the answer to this. Now some of them are pretty obvious. So the value of services and service management to service consumers is they get the benefit of using the service, and their costs and their risks are optimized. Sorry, the definition of a service told us that. The service provider gets funding from the consumer, as well as business development, improvement of its own image if its services are good again, fairly obvious. The bottom ones, shareholders is also pretty obvious that they get financial benefits such as dividends and a sense of a surety and stability of the organization if it's got good services and good service management. service provider employees there financial and non-financial incentives so that they get paid as a result of delivering good services, career and professional development, perhaps within service management.
Certainly, I know a lot of people who've benefited outside of just having their day job from working together with peers in service management. They would certainly see that as a benefit and hopefully, a sense of purpose. Wider society and community there organizations that have got good services make money, so they provide employment and taxes and very often contribute to the development of the communities that they're part of.
Finally, there are charity organizations as a potential stakeholder. And successful organizations, good services, successful organization, good products, they're going to be able to contribute to different charities financial and non-financial contributions from other organizations.
For example, I work with, at times, colleges in the UK because organizations that they work with as a college have got good services. That's enabled these other organizations to donate millions of pounds to the kids to this college to allow the technical college to progress so that the college is a registered charity and as a charity organization has got both financial and non-financial contributions from other organizations that have got good services and good service management.
The PESTLE Model
Now, we're going to look at the PESTLE model and this is all about the factors that affect the four dimensions of service management. And I'm going to use a I'm going to use an illustration here. So let's say that this piece of paper that I've got here is the area that I've got to design my service. And there are natural constraints to that in the four sides. Now, if we think about service management, we've got any number of constraints. So I've designed a new service on here it's an invisible one but I've designed a new service on here. Somebody comes along and says, see that service you designed? Yeah. Well, we've got a problem with it. So what's the problem? Oh, well, you've got telecommunications in that service and in the different countries that we deliver this we've got to use a telecommunications provider from that country. Oh, OK then. So what you're doing is you're telling me that there is a political factor at play here, OK.
[Video description begins] The instructor writes: POLITICAL against the first row on the screen. [Video description ends]
So that's changing the shape of my piece of paper and my area that I've got a design on straightaway. So what happens is that disappears because of this political factor. And, all of a sudden, any part of the service that I had up here, I've got to redesign down here and it might mean shifting other things about.
Now, all of a sudden, somebody else comes along and looks at my design and says, hey, Barry, you've got a problem there. What's that? Oh, the economics. We certainly can't spend that much on the service. There's no business case. There's no justification for spending that much. Oh, so you're telling me now that what I've got is I've got an economic factor at play.
[Video description begins] The instructor writes: ECONOMIC against the second row on the screen. [Video description ends]
Ooh, yeah, yeah, that's what we're telling you.
So suddenly the shape of my piece of paper changes again. And I've got to redesign my service, so it now looks like that. And I've got to move what was there and move it around. And that takes time, and that's delay, and that's less profit for the organization. That's less value for the customer.
And then all of a sudden somebody comes along and says, oh, yeah, yeah, you know the support we're having for this service? Yeah. Well, we're using offshore and so their might be cultural elements at play here that you've got to think about in your service design. All right, OK then. So those cultural and social elements are going to change the shape again.
[Video description begins] The instructor writes: SOCIAL against the third row on the screen. [Video description ends]
So I've now got social elements at play. This is starting to cost me a lot of time and a lot of money, and we're still not getting any value. And then somebody comes along and says, Barry, you've made some assumptions that about on-premise IT. We're actually going to use cl oh, yeah, we're going to use cloud, are we? All right, I know where this is going.
So all of a sudden what I do is there's another piece and the shape of my piece of paper has changed again. And everything that was here I've now going to move around and because I've got new constraints at play, and these new constraints in this one are technology constraints, OK.
[Video description begins] The instructor writes: TECHNOLOGY against the fourth row on the screen. [Video description ends]
So I've got my technology constraints at play.
Then along comes someone oh, yeah, but, of course, you've taken account of that new update to the GDPR regulations haven't you? Uh, no. Right, OK, here we go again. And we've got a piece of paper, and there's part of our design that's gone away, and, all of a sudden, it's going to take time and effort to redesign.
And what's happened is I've got legal coming in, and I've got legal constraints and factors at play.
[Video description begins] The instructor writes: LEGAL against the fifth row on the screen. [Video description ends]
So where does that take us? Well, finally, somebody comes along says, Barry, that's almost perfect, but you've forgotten that we're a carbon neutral organization. And, of course, there are environmental factors at play. So yet again I've had to redesign my service its time, its efforts. And I've got my environmental factors at play.
[Video description begins] The instructor writes: ENVIRONMENTAL against the sixth row on the screen. [Video description ends]
And so what you see there is I've got my P-E-S-T-L-E, my PESTLE all of my environmental factors. And, oh, oh, oh, wouldn't it have been much easier if I'd have understood that that was the shape of the piece of paper that I had to design on right from the very start?
Organizations and People
The first of the four dimensions I'd like to talk about is organizations and people.
[Video description begins] The screen displays a heading titled: Organizations and people. It contains four bullet points, namely: Roles and responsibilities, Organizational structure, Culture, Staffing and competences. [Video description ends]
This can involve a whole host of different things. Roles and responsibilities some organizations smaller organizations using ITIL IT service management will combine roles and responsibilities together, or this will separate them out. Your organizational structure some organizations prefer very hierarchical organizational structures. Others will prefer very flat organizational structures.
Depends again, on the type of organization that you are. One big factor that always must be considered as part of service management is the culture of the organization. And culture is absolutely central to more modern techniques such as DevOps and Agile. Culture is incredibly important. And you look at things like the work of Charles Handy, who describes four different types of cultures in organizations and why organizations do and do not always work together.
And then finally, the staffing and the competencies. Again, you can have 100 staff working at an organization. And they may all have very different competencies and different roles, different responsibilities, different culture. You could even get cultures within cultures in organizations. Certainly within bigger organizations, you can see different types of culture operated, and again across different countries, different continents within the same organization. So people is always one of the dimensions that you must consider when looking at service management.
Information and Technology
As with the other three dimensions, information and technology applies both to service management and to the services being managed.
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The technologies that support service management include things like workflow management, knowledge bases, inventory systems, collaboration tools, analytical tools, and so on. Service management, as well, is increasingly benefiting from technology-related innovation. Things like artificial intelligence, machine learning, and other cognitive computing solutions are being used more and more at all levels now. What you see here is almost a checklist of information and technology questions that your organization can ask in order to manage the services and the products and the service management surrounding your offerings.
What information is managed by the services? What supporting information and knowledge is needed to deliver and to manage the services, so, for example, supporting knowledge, frequently asked questions? If people are going to use self-help, what information are you going to need to allow that to happen? How will the information and knowledge assets be protected, managed, archived, and disposed of?
Again, very, very important in many organizations now with the advent of regulation and global regulation, European regulation such as GDPR. Is the technology compatible with current architecture
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of the organization and its customers? More and more the technology is becoming and the compatibility of the technology is becoming less of an issue than it used to be, but it's still an issue to be thought about. Are there any regulatory or compliance issues with the organization's policies and information security controls or those of its customers?
And many of you, I'm sure, will be working in very, very regulated industries, such as finance or pharma as examples. Will the technology be viable in the future? Many organizations, technology changing that quickly now, they need to make sure that the technology that support services and service management is going to be future proof to prevent them having to reinvest in new technology solutions every six months.
Does the technology align with our strategy or our service consumers? So again, if there's a technology the organization using Cloud, the organization using public cloud, then do we align with our organization or the service consumers and what their organization is using? Do we have the right skills to support and maintain the technology? Again, as technology changes very, very quickly, then the skills that we need will change equally quickly.
Is the technology sufficiently automated, or does it have any other enhancing features? And what you'll certainly see with IT service management technology now is areas like incident management, configuration management, service catalogs, and so on. Much, much more achievable now and achievable to do very, very well through automation.
And particularly, if you look over areas that service management interfaces with, such as DevOps and Agile, then automation is certainly a massive part of what they have to do. And finally there, does the technology introduce new risks or constraints. A certain new technology can introduce risks. I give you a great example of driverless cars.
Absolutely superb innovation, but what happens if somebody hacks into that driverless car. Is that a new risk? Is that a particular constraint on the design of those particular services? So what we've got that are a whole host, almost a checklist, of questions that you can ask about information and technology to ensure that we get this balanced, holistic approach.
Partners and Suppliers
Third dimension of service management is partners and suppliers.
[Video description begins] The screen displays a heading titled: Partners and suppliers. It contains one bullet point. [Video description ends]
I think it's true to say that every organization and every service depends, to some extent, on services provided by third party for their organizations. Relationships between organizations may involve various levels of integration and formality. This ranges from formal contracts with clear separation of responsibilities to more flexible partnerships where parties share common goals and risks and collaborate to achieve desired outcomes. So let's take a look at some of the factors influencing whether we will use a third-party supplier or partner.
[Video description begins] The screen displays bullet point "Influencing factors:" below the heading Partners and suppliers (cont.). This bullet point contains seven sub bullet points. [Video description ends]
Strategic focus of the organization many years ago I worked for a retailer in the UK who chose to outsource the whole of IT and facilities management. They wanted to maintain their strategic focus on what they saw at the time as their core retail activities. Corporate culture this is an interesting one and can be a big problem with third parties. I mentioned before the work of Charles Handy. You've got an organization that's got working for you that's got a power culture where all of their decisions are made centrally, and you're working in an organization that's very, very task-orientated where decision making has been moved to various points throughout the organization where it's best.
Then suddenly, what you've got is an organization that can make decisions when and where it needs to on one side of the equation and an organization that can only make decisions in one place on the other side of the equation. Almost certainly, that's going to lead to some sort of collision and the third-party partner and so or not working.
Resource scarcity it might be that your organization is absolutely struggling to find people who can program in Python or some other weird and wonderful language. I used COBOL and Fortran many, many years ago. They're ready for the museum now, but certainly, the resource scarcity could be a reason why you engage a third-party partner or supplier.
Cost put quite simply, the cost of looking after your service that's what it costs internally. That's what it costs externally. Wow, where do I sign up? Subject matter expertise it could well be that, in particular, you want to refocus and refactor some of your people onto newer technologies. And what you then need is some of your legacy technology still needs to be looked after.
That might be where the subject matter expertise that might be a reason to engage a third party to look after that to look after that legacy technology. There are external constraints to think about. I used to work for an organization many years ago that had an ethical committee, and the organization I worked for had a very, very strong marketing brand around its ethical approach to business.
And that ethics committee could stop you using a particular partner or supplier bang like that. Because, obviously, if the whole organization relied on its ethical approach, then having a partner that was unethical probably wasn't going to be the best image for the organization to portray. And finally, you might decide to use a partner or a supplier due to demand patterns.
And you can certainly have demand patterns around the holiday times in a year or particular times of your financial year or your trading environment where you do need to bring in extra external resource to help you to cope. So there are a whole lot of influencing factors on whether you decide to or decide not to use partners and suppliers.
Value Streams and Processes
The fourth dimension of service management is value streams and processes.
[Video description begins] The screen displays a heading titled: Value streams and processes. It contains one bullet point on the left, and a flow diagram, labelled as: Value stream steps on the right. The flow diagram contains: Input, Step 1, Step 2, Step 3, and Output. [Video description ends]
Like other dimensions, the value streams and processes dimension is applicable both to the SVS, the service value system, in general and to specific products and services. In both contexts it defines the activities, workflows, controls, and procedures needed to achieve agreed objectives. What I'm going to do is give you a couple of definitions, first, and then illustrate it with an example. So the first definition is that of a value stream, a series of steps an organization undertakes to create and deliver products and services to consumers. And we'll look at the service value stream a little bit the value streams associated with ITIL a little bit later on. [Video description begins] The screen displays one bullet point below the heading Value streams and processes(cont.). [Video description ends]
There's also processes and they're defined as a set of interrelated or interacting activities that transforms inputs into outputs. A process takes one or more defined inputs and turns them into defined outputs. Processes define the sequence of actions and their dependencies. Now, usually, sat below those two, we will have procedures and work instructions. So let's look at an example of that.
Value Stream Example
So let's take a look at a value stream example. The value stream starts let's put our value stream inside of there. And it starts our value stream with an input.
[Video description begins] The instructor draws a box on the screen. He then draws an arrow pointing towards the box. [Video description ends]
Let's say that a user wants access to the services and to the corporate network and so on. So the user wants a laptop with access to the corporate network.
[Video description begins] He enters the text: LAPTOP at the end of the arrow. [Video description ends]
So that's the demand that comes into this particular value stream. Step one in this value stream might well be to go and procure the correct laptop for that user, so that they're able to run the services that they need.
[Video description begins] He draws first box inside the rectangular box. The first box is labelled as: PROCURE. [Video description ends]
Step two, once that's been delivered, it might be to configure that particular laptop to make sure that it's got everything that that user needs to be able to work.
[Video description begins] He draws second box inside the rectangular box. The second box is labelled as: CONFIG. An arrow points from PROCURE box towards the CONFIG box. [Video description ends]
Step three in our particular value stream that we've got going on here, is we deliver that laptop to our customer, to our user, and we train them and give them all the necessary access.
[Video description begins] He draws third box inside the rectangular box. The box is labelled as: DELIVER. An arrow points from CONFIG box towards the DELIVER box. [Video description ends]
And what that leads to, is the output where what they can do, is they can access corporate resource.
[Video description begins] He draws an arrow from the DELIVER box, that points outside the rectangular box. He enters the text: ACCESS CORP RES. [Video description ends]
OK? So they've got access to the corporate resource. And there, set inside this box, is our value stream of procure, configure, deliver. Each one of those might well be a process there's a procurement process. There's a configuration there's a deliver but it's very, very important that we get the right information up here for what type of laptop, what they need on it, to give them the output and the outcome that they actually want, which is the access to the corporate resources.