Value can be subjective: the value is determined by the stakeholders.
Organizations increasingly recognize that value is co-created through an active collaboration between stakeholders, including the service providers and service consumers. Each stakeholder receives its own value in the interaction. The relationship between service provider and service consumer is mutually beneficial. An effective service value chain requires collaboration between providers and consumers.
After many years of focusing on operational excellence, the era of customer-focused service excellence has now arrived. Service delivery is increasingly becoming the core element in the economy. People are buying less and less ‘pure’ goods, and suppliers are increasingly packaging supplied goods into a service offering. The support that comes with that service has already revealed itself as a dominant differentiator for the success of organizations. This observation applies to both internal and external services.
In the economy this shift is indicated with Service-Dominant logic (S-D logic), as a successor to the Goods-Dominant logic (G-D logic) in which the transfer of goods played the main role. According to the S-D logic, service is the fundamental basis for all value-sharing1.
G-D logic focuses on value creation in the transfer of goods (value-in-exchange). S-D logic focuses on value creation in the use of resources (value-in-use), where value is co-created by providers and consumers.
■ 2.2 STAKEHOLDERS
There are various stakeholders involved in the co-creation of value: service providers, service consumers, and others. The ITIL 4 guidance is applied to the way organizations can improve their contribution.
Organization: A person or a group of people that has its own functions with responsibilities, authorities, and relationships to achieve its objectives.
An organization can be anything, ranging from a single individual or team, up to a complex set of organizational structures in a network.
2.2.1 Service providers
Service provider is a role performed by an organization in a service relationship to provide services to consumers. A service provider co-creates value with the consumer, by offering services.
Service providers can be external or internal to the consumer’s organization. An internal service provider is part of the same organization as the consumer. External providers often provide their services as a commercial offering to various consumers. The provider-consumer model can be applied to create complex supply chains, service networks, or service ecosystems.
A service provider needs to have a clear understanding of who its consumers are.
2.2.2 Service consumers
When receiving services, an organization takes on the generic role of the service consumer. Service consumers collaborate with service providers in the co-creation of value.
For the generic role of service consumer, ITIL 4 makes a distinction between three separate roles: customer, user and sponsor.
Customer: A role that defines the requirements for a service and takes responsibility for the outcomes of service consumption.
User: A role that uses services.
Sponsor: A role that authorizes budget for service consumption.
These roles can be used in any combination. In any service relationship it is important that these roles are fully identified, as this will assist with communications and the management of stakeholders. Each role could have different expectations of the services and the expected value from them.
2.2.3 Other stakeholders
There can be many other stakeholders that play a role in value creation:
■ Shareholders are interested in the success of the organization, often in terms of financial benefits.
■ Employees of the service provider may be interested in other value, including professional growth, financial compensation and sense of purpose.
■ The community may have relations with the services. This may cover charity, environmental factors, employment, social impact, etc.
■ 2.3 PRODUCTS AND SERVICES
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.
Services are based on one or more products.
Product: A configuration of an organization’s resources designed to offer value for a consumer.
The organization’s resources include the four dimensions of service management: organizations and people, information and technology, partners and suppliers, value streams and processes. The service provider enables access to these resources, to be used by the consumer in such a way that these resources are valuable to the consumer. Goods may be transferred to the consumer as part of the service.
Products may not be exclusive to consumer groups: they can be used for different purposes and for different consumer groups.
Products are usually only partially visible to the consumer.
E.g., a network provision can be part of the offered product, but consumers will not be able to see the network itself, they will only be able to use it for their own purposes.
2.3.1 Service offerings
A service provider and a consumer can agree on services that are offered by the service provider.
Service offering: A formal description of one or more services, designed to address the needs of a target consumer group.
A service offering may include:
■ a wide variety of goods (e.g. a laptop), to be supplied to a consumer
■ access to resources (e.g. a network or storage, possibly through a laptop), granted or licensed to a consumer under agreed terms and conditions
■ service actions (e.g. user support), performed to address a consumer’s needs
The service offering is often demonstrated to consumers in the format of a service catalogue.
Services are offered to target consumer groups, internal or external to the service provider organization. The service provider is responsible for the resources made available to the consumer, goods to be supplied, and service actions to be performed.
■ 2.4 SERVICE RELATIONSHIPS
Any and all organizations are both service provider and service consumer. An organization will assume the role of provider or consumer within the context of a given relationship with another organization.
When provisioning services, an organization takes on the role of the service provider. The provider can be external to the consumer’s organization, or they can both be part of the same organization.
Service