itil® 4 strategist: direct, plan & improve (dpi) · 2020-07-14 · itil® 4 strategist:...

ITIL® 4 Strategist:Direct, Plan & Improve (DPI)

360 Learning Portal, LLC.

ITIL® is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. The Swirl logoTM is a trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

ITIL® 4 Strategist: Direct. Plan & Improve (DPI) course.

Version Date Comment

1.0 July 2020 First Printing

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This ITIL® 4 Strategist: Direct, Plan & Improve course and related materials were developed by 360 Learning Portal, LLC. These materials (documents, slides, graphics, etc) are the property of 360 Learning Portal, LLC., Except where noted.

This publication is one component of the 360 Learning Portal, LLC’s. Accredited ITIL® 4 courses. It is licensed for a one-time usage to the exclusion of the registered student as part of a course delivery by 360 Learning Portal, LLC., or one of its registered affiliates. No part of this publication may be reproduced, published or re-distributed in any form or by any mechanism without prior written permission of the copyright holder. As a component of accredited courseware, this publication may not be re-sold. Usage of the license is valid only for the original course participant.

Information in this publication is published “AS-IS”. 360 Learning Portal, LLC. makes no representations or warranties of any kind with respect to the information in this publication. We specifically disclaim any implied warranties of

ITIL® is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

IT Infrastructure Library is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

All other products, trademarks, company names and product names used herein are the property of their respective owners. 360 Learning Portal LLC. has used its best effort to distinguish proprietary trademarks from descriptive names by following the capitalization styles used by the respective owners.

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Accreditation

This course is accredited by PeopleCert on behalf of Axelos. This accreditation signifies that this course, delivered in the intended manner, meets all of the criteria as defined by the official ITIL® syllabus for the ITIL® 4 Managing Professional Transition certificate.

360 Learning Portal, LLC. is an Accredited Training Organization (ATO), and your trainer is an Accredited Trainer. This ensures that you are about to receive a quality training program, delivered by a quality instructor.


IT Infrastructure Library is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

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Information

In this course, you will be immersed in the overall concepts, processes, policies, and methods associated with the ITIL® Service Management Framework. This course is designed using an engaging approach to learning the core disciplines of the ITIL® best practices, and this course positions you to successfully complete the associated ITIL® exam, which is generally offered on the last day of the course. The exam may also be offered as an online web-based proctored exam.

Course Exercises

This course includes practical exercises. These exercises provide you with the opportunity to apply what you have learned. The scenarios are used to help you understand how the ITIL® concepts provide value to the Customer and Service Provider.

Additionally, the practical exercises prove beneficial as they allow you an opportunity to review and reinforce the knowledge you acquired. This review is an important function of the practical exercises. As you work through the exercises, please keep in mind that you are applying what you have learned and studying for the exam at the same time.

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Registering for the exam

There are two different formats for taking the ITIL® 4 Strategist: Direct, Plan & Improve (DPI). The first is to participate in person (or online) in an accredited ITIL® course and take the paper based exam while the exam is being proctored by an in-person accredited invigilator.

The other format of taking the exam is a web proctored format where the invigilator will observe you (via a web cam) take the online version of the exam. In either case the exam will be officiated by a actual person during your exam.

You will need to register with the exam agency, Peoplecert.1. Visit http://peoplecert.org 2. Create your PeopleCert Account or If you already have one, please sign in.3. Enter the Exam Code provided to you by your instructor4. Follow the on-screen instructions, submit the required information and

schedule your exams.

Peoplecert exam registration instruction may vary. Your instructor will provide you with specific information on how to register for the exam.

http://peoplecert.org

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Course Timing

Day 1 Day 2 Day 3

Course Introduction Governance, Risk & Compliance

Improve Value Streams

Service Management Review

Continual Improvement Review

Key Concepts and Terms for DPI

Organizational Change Management

Sample Exam 1

Cascading Objectives Methods Official ITIL® Certification Exam

Prerequisites

The candidate must have passed the ITIL® 4 Foundation examination. In addition, the candidate must have attended an accredited training course for this module (the recommended duration for this training is 18 hours including the examination).

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Table of Contents

ITIL® Certification schemeService Management Review

Four Dimensions of Service ManagementITIL® Guiding PrinciplesService Value SystemService Value Chain

DPI Unit 1 DPI ConceptsDPI Unit 2 Cascading ObjectivesDPI Unit 3 Governance, Risk & Compliance DPI Unit 4 Continual ImprovementDPI Unit 5 Organizational Change Management (OCM)DPI Unit 6 Measuring & Reporting indicators & KPIsDPI Unit 7 Direct, Plan & Improve Value Streams

101231375461667888102132144158

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ITIL® 4 Certification Scheme

ITIL® Certification Scheme

The ITIL® certification scheme is broken into two tracks. The ITIL® foundation certification is a prerequisite to either of the two different tracks in the ITIL® certification scheme. The two tracks address the needs of different audiences. The first track is the ITIL® Managing Professional (MP). The second track is the ITIL® Strategic Leader (SL).

ITIL® Foundation Certification

The ITIL® foundation certification is the entry level starting point for practitioners and leaders to understand the key elements, concepts and terminology used in ITIL®. This will provide a basic understanding of the ITIL® IT service management concepts. These concepts include:

• Four dimensions of service management • The Service Value System• The Seven Guiding Principles• The Service Value Chain• Management practices

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ITIL® Managing profession (MP)

There are four Managing Professional qualifications. If you complete all four of the certifications in the Managing Professional track you will have earned the ITIL® Managing Professional designation.

The four certification exams for ITIL® Managing Professional include:• ITIL® Specialist: Create, Deliver & Support• ITIL® Specialist: Drive Stakeholder Value• ITIL® Specialist: High Velocity IT• ITIL® Strategist: Direct, Plan & Improve

The second track is the ITIL® Strategic Leader (SL) designationThere are two certifications required to achieve the designation of ITIL® Strategic Leader. The two certifications exams for ITIL® Strategic Leader include:

• ITIL® Strategist: Direct, Plan & Improve• ITIL® Leader: Digital & IT Strategy

The certification level of ITIL® Master is being updated at the time of this publication

Transition from ITIL® v3

If you have 17 or more credits in the ITIL® V3 Scheme. If you are ready to take the ITIL® V3 Managing Across the Lifecycle Course, it may be an option for you to bridge to ITIL® V4 Managing Professional instead of completing the ITIL® Expert certification.

The requirement to bridge to ITIL® Managing Professional is to have 17 credits from ITIL® V3, this implies that a student is ready to take the MALC class or already is an ITIL® Expert V3. If you are an ITIL® Expert obtained from bridging from version 2 to version 3, you can transition to ITIL® Managing Professional through a single class and single exam.

To become an ITIL® Strategic leader (SL) there will be an additional exam / course of ITIL® Leader Digital & IT Strategy. The assumption is if you are an ITIL® Managing Professional you will have the knowledge of the ITIL® Strategist: Direct, Plan & Improve.

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ITIL® 4 Foundation Review

IT Service Management Review based on the ITIL® 4 Foundation.


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The service provider will deliver the service to the service consumer. The IT service should facilitate the customer’s desired business outcome by performing a function required by the business or by removing a constraint from the business process.

The users of the service will consume (or use) the service supporting the business outcomes. The customer/consumer will realize value through the users consuming the service and facilitating the customer’s desired business outcome.

A portion of the value proposition for the customer is the customer does not have to manage the specific components needed to deliver the service.

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Customers want to achieve their desired business outcomes without the accountability for the specific costs and specific risks associated with the delivery of a service. The customers want the results or outcomes without the management hassle of the individual components required to deliver or provision the service to the customer.

Water exampleIf you live in a municipality, city or town or county that provides water service to your home, you subscribe to a service. How does the water arrive at your home? The answer is “I don’t care. Because I pay for a service.” I don’t care about the details of how the water arrived at my house.

Water might start in a reservoir. The water is pumped to a treatment plant. The water has to be pumped from the treatment plant to storage towers. The water will then be pumped from the storage towers to local water mains. Water mains will bring the water to the neighborhoods and ultimately to the house.

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With all of these sub functions such as pumping, storage and treatment are not readily visible to the end consumer or customer of the water. As a customer and consumer I subscribe to a water service. This water facilitates desired outcomes such as drinking, cooking and washing. I received the water from the city without having to deal with the sub-infrastructure. I don’t care to particularly know about or manage the cost and risk of the sub-infrastructure and their components. The water service that I subscribe to is perceived by the customer as a self-contained coherent entity. All I care is that the water arrives when I turn the faucet on and the water safe to drink.

The water example is a good non-IT example of a service. The water service is perceived as a self-contained coherent entity by the end users and customers that don’t necessarily want to know about or to manage the subcomponents that comprise the water service. The customer consumes water to fulfill or facilitate a desired outcome.

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Email example

Many end-users rely on email for communication. Email is an electronic form of communication where a message or can be sent from one person to another. The email service is not a single component within the IT service provider’s organization. The email service is perceived by the customer as a self-contained coherent entity. End-users don’t want to understand or manage the sub-systems or sub-components that make up the email service for that organization.

To make up a typical email service the service provider would have to include:• Processing platform ie.. Hardware, servers• Server operating system• Email server application• Email desktop application (client)• Directory services (authorization)• Storage• Connectivity (network)

The email service facilitates the user’s desired business outcome of communication. The email service is perceived by the customer and user as a self-contained coherent entity as an all-inclusive either application or package that sends and receives messages. The end customer and consumer do not want to understand manage or maintain the risk and cost of the sub-systems required for the email service to perform.

Customers/consumers and stakeholders want outcomes that facilitate their desired objectives. The consumers do not want to have to manage the sub-components of the service that facilitates that outcome. Outcomes are the results that customers desire. A service facilitates the consumer’s outcomes. A consumer’s outcome might be a holiday vacation in an exotic location.

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The service offering is how the service provider will position or publish their service offering as a service. The service offering can include goods that are actually transferred to the consumer, access to resources or a license the use of the service provider’s assets and can also include certain service actions that are performed as part of the overall service delivery.

GoodsGoods are resources that are transferred from the service provider to the consumer under the service agreement. Ownership of the goods are transferred to the consumer. The consumer takes responsibility for future use of the goods.

Goods are items that can be supplied to a consumer. These goods are generally transferred from the provider to the customer with the customer taking full responsibility of the goods and their future utilization. The consumer takes responsibility for future use of the goods.

If I were to buy a car, the car dealership (service provider) would transfer the ownership of the car to me and at that point I would as the consumer would be responsible for the upkeep and maintenance of that vehicle going forward under the terms and agreements associated with the purchase.

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Hotel example of goods.The hotel may offer bottled water. Ownership of the water is transferred from the hotel to the guest. This could be included in the hotel rental agreement. The hotel guest can do whatever they with the water (drink, use for coffee or tea, use on toothbrush etc).

Access to ResourcesAccess to resources is the granting of permission to utilize a resource under the agreement between the service provider and the consumer in regards to the delivery of a service.

Access to resources is different from the ownership and responsibility of goods that are being transferred to the customer, ownership is not transferred to the consumer under the access to resources. Access is granted, or licensed for a customer to utilize a resource. Access could be both physical and/or logical. Logical access can be the licensing of software and granting the utilization of that software over a time period.

Access to resources is a mechanism that allows service provider to grant permission in the form of a license that does not transfer ownership and allows the consumer to utilize the service providers resources under agreement.

When access to service resources is part of a service, the ownership of the resource is not transferred to the consumer and the consumer only has access to the resources according to the agreement. These agreements are often limited by time of utilization or time period for which the resource can be utilized.

For example I can license the use of software annually. This does not transfer ownership of the software to me, but by paying a license fee, I can use the software for a period of one year.

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Access example: Hotel roomAccess is granted under an agreement. The hotel room is managed by the hotel management company. The hotel rental fee does not transfer ownership to the renter. The renter may stay in the hotel room (Access to resource) under the terms of the licensing agreement. Generally a hotel has other features that may not be as visible such as air conditioning, gym or business center.

Software example:Software is a good example of a license to have access to use of a product. Ownership is not transferred but you are granted access to these resources, instead the user is granted access to use the software resources.

Service ActionService actions are those activities are performed by the service provider in support of the customer’s business outcome. The service actions generally help facilitate the customer’s desired business outcomes. The service actions are performed according to the agreement with the customer. A very common service action would be end-user support for hardware or software.

Service actions are agreed activities that the service provider will perform in support of normal service delivery.

Service Relationship Management

Definition: Service RelationshipA cooperation between service provider and a service consumer. Service relationships include service provision, service consumption and service relationship management.*

* Copyright © AXELOS Limited, Used under permission of AXELOS Limited. All rights reserved

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Service relationships are established between two or more organizations to co-create value. Service relationships are simply relationships that organizations have between a supplying organizations and consuming organizations. The goal of all organizations is to create value for stakeholders. Service providers and customers will need to have a service relationship in which all parties of the relationship will cooperate to achieve beneficial results for all parties in the service relationship. In doing so value can be co-created.

The components of the service relationship include the following:• Service offering; the service offering is that formal description of services

that are designed to support the consumers business outcomes.• The service relationship model; this model demonstrates the relationship

between two or more organizations that offer and provide and consume services.

The Service Relationship Model demonstrates the service provisioning by the service provider, service consumption by the consumer and the service relationships.

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Definition: Service ProvisionService provision are the activities performed by an organization to provide services.*

Service Provision includes:• Management of the providers resources, configured to deliver the service• Ensuring access to these resources• Performance or fulfillment of the agreed service actions• Continual improvement of services delivered

Service provision may also include the supplying of goods as part of the service.

Definition: Service ConsumptionService consumption are the activities performed by an organization to consume services.*


Service Consumption includes:• Management of the consumer’s resources• Service actions performed by users• Receiving or accepting goods

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Stakeholders are any individual or group that has an interest in the delivery of services. Stakeholders can be both internal or external.

Definition: ConsumerThe service consumer is the role that receives services from the service provider. The service consumer is a generic role that simply consumes the service.*

There are three type of consumers:• Customer• Sponsor• User

Definition: CustomerThe role that defines requirements for services and takes responsibility for outcomes from service consumption.*


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The customer is differentiated from the user as the customer defines the requirements while user just uses the service and may not have direct input on the requirements or the direct negotiation of the requirements with the service provider. The customer will agree with the service provider on service level targets within the service level agreement (SLA).

Definition: SponsorThe role that authorizes the budget for service consumption.*

Sponsors are those who actually fund or authorize the budget for the services to be deployed by the service provider in support of the customer’s desired business outcome.

Definition: UserThe role that uses services.*

Other stakeholders may include:

ShareholdersShareholder are directly invested financially in the organization. In publicly held corporations shareholders on the stock of the organization itself.

EmployeesEmployees work for the consumer organization. Employees receive professional growth and financial compensation.

CommunityThis may include non-profit organizations that benefit form donations from the service provider, that may have nothing to do with the delivery of services. A service provider may choose to donate time and resources to worthwhile charities like the American Red Cross®.


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Value is perceived. Value is subjective. Value is in the eye of the beholder.

Definition: Value“The perceived benefits, usefulness, and importance of something.”*

Inherent in the definition of value is the understanding that value is subject to the perception of the stakeholders, whether they be the customers or consumers of a service, or part of the service provider organization(s). Value is subjective. Value is not only based on the financial component. Value is perceived by the customer to the to level the product or service facilitates the customer’s desired business outcome. Value is in the eye of the beholder.

In the example of an auction, the participants bidding on an item will have different set limits of how much they are willing to pay for that item. The amount of money the customer is willing to pay for the item at an auction will be based on the value that specific customer places on the product or service being auctioned. This is why some bidders will only bid when the price is low because the perceived value (benefit, return) is high, others will bid higher amounts because the perceived value to those bidders is greater.


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Co-creation is the creation of value for all parties in the transaction. In a service provider / customer relationship both parties, the customer and the service provider must realize value in the transaction. Value is perceived by the consumer.

Value is a two-way transaction. The service provider provides value to the consumer by delivering a service that the consumer wants. The service generally will aid in the creation or facilitation of the consumer’s business objectives. The customer transfers something of value in return to the service provider in this transaction. For an external service provider the customer generally provides financial compensation.

The reason customers subscribe to services is to facilitate their desired business outcomes. A customer’s desired outcome may be the processing of online orders. A shopping cart service for an online retailer can be subscribed to without the retailer having to manage the details or writing the code of their own shopping cart when there are shopping carts readily available for small fees. The utilization of the shopping cart in this example facilitates the customer’s outcome of processing online orders.

Definition: OutcomeThe outcome is s result for a stakeholder enabled by one or more outputs.*


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RideShare Co-Creation of value example

The RideShare driver provides a service by being available to transport the passenger to their destination of choice. The passenger receives value in the form of transportation, without the management of the underlying assets necessary (car, vehicle).

The RideShare driver receives monetary compensation (Value) for performing the activity of transportation. The RideShare driver is then responsible for the maintenance of their vehicle. For value co-creation to occur there must be benefit to all parties in the transaction.

Definition: Output“Output is a tangible or intangible deliverable of an activity.”* The output can be thought of as the end result or the reason that the activity is being performed. Activity outputs are generally inputs to other activities.


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Cost

In a service relationship some of the specific costs of maintaining and provisioning a service can be transferred from the customer to the service provider. These specific costs are removed form the customer but may be included in the overall price of the service charged to the customer by the service provider.

Definition: CostCost refers to the amount of money spent on a specific activity or resource.*

The customer will incur the cost of consuming the service. These are costs imposed by the service provider. The service provider may impose costs or charge for services that have been provided. Other costs may be incurred by the customer, such as cost for training the customer staff on how to utilize the service, the additional costs may or may not be included in the price of the service itself.

RiskMany frameworks, both service management and project management frameworks, take the approach on risk as risk being a level of uncertainty. Risk is a possible event. For most frameworks a good risk is referred to as an opportunity and a bad risk is referred to as a threat. ITIL® refers to risk as a threat that could cause harm or loss.

Definition: RiskA possible event that could cause harm or loss, or make it more difficult to achieve objectives.*


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The service provider will assume the risks of delivering the service. These specific risks are removed from the customer and transferred to the service provider. The service provider assumes the risk as part of the service offering.

For example: I hire someone to maintain my yard. I could maintain my yard myself and this would include the maintenance and upkeep of a lawnmower. By subscribing to a yard maintenance service, any risk of the lawnmower failing is the responsibility of the service provider and not mine, as the customer. As a customer I pay for a service and the service provider will handle any of the specific costs and risks associated with the service offering and the delivery of the service.

The customer can contribute the reduction of risk by defining the service requirements and the specific required outcomes that are required from the service that will facilitate the customer’s desired business outcomes. By properly defining the outcomes expected and demanded by the service, the level of negative risk the customer is exposed to can be reduced.

The customer should clearly communicate the expected critical success factors (CSFs) that apply to the delivery of the service or the consumption of the service along with clearly defining and communicating constraints that may limit the service provider in achieving or facilitating the customer’s desired business outcomes.

An important aspect of risk is that risk distracts from value. The perception of risk will be seen as to reduce the perception of value from the consumer’s perspective associated with a service. In the example of buying a used car, an older car may seem riskier as it may be perceived to have the opportunity to fail much more, thus causing the customer to incur repair costs. A newer car may be perceived as less risky because the parts are not as worn and may not be as likely to fail as an older part. All things being equal a newer vehicle will have a greater value than an older vehicle based partially on the perception of risk associated with the product.

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Utility and Warranty

The definition of a service begins with: “is a means of enabling value co-creation by facilitating outcomes…”*. The value of the service originates from what the service enables the customer to achieve. The value of the service is not determined by the service provider, but by the customer.

Definition: UtilityUtility is the functionality offered by a product or service to meet a particular need.*


Utility is what the service does for the customer. This is referenced to as being “fit for purpose”. Fitness for purpose is the service’s ability to contribute to the customer’s achievement of the customer’s desired business outcomes. The utility of the service can be referred to as the functionality provided or performance supported. Utility can also be the minimization of constraints that will allow the customer to better reach their goals.

Utility refers to the service meeting the functionality requirements of the customer. Utility can also refer the ability of the service to remove constraints from the customer’s business process.

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Definition: WarrantyWarranty is the assurance that a product or service will meet agreed requirements.*

Warranty describes how well the service will perform. Warranty refers to the usability of a service, often referred as the service being “Fit for Use”. The characteristics of warranty are normally documented within a service level agreement (SLA) indicating levels of:

• Service availability• Service performance or capacity• Recoverability or continuity• Level of security for the service

Warranty requires that a service has defined and agreed conditions that are met. The agreed conditions are generally targets agreed and defined in the SLA for the service.

“Utility is what the service does, and Warranty is how it is delivered.”

Value can only be created through the delivery of both the appropriate levels of utility and warranty. The service has to facilitate an objective that the customer would like to achieve and perform at levels that allow the service to be usable from the customer’s perspective.


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The Four Dimensions of Service Management are based on the previous ITIL® concept of the four Ps of Service Design.

The Four Dimensions of Service Management is a model of which each component of the Service Value System should be considered.

1. Organizations and People2. Information and Technology3. Partners and Suppliers4. Value Streams & Processes

The Four Dimensions of Service Management are used to ensure that the service provider develops a comprehensive approach for the design and risk management of new or changed services. The four dimensions are the areas that need to be considered for the design of effective services and service management practices/processes.

The Four Dimensions of Service Management help the service provider develop a holistic approach to service management. This means that these four dimensions are equally important and must be considered during the design of services to ensure that value is co-created for all stakeholders.

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There are multiple factors that affect the four dimensions. These factors are included in the PESTLE Model. PESTLE is an acronym for the following external factors:

• Political factors• Economical factors• Social factors• Technology factors• Legal factors• Environmental factors

Organizations and People

The first of the four dimensions is Organization & People. This dimension ensures that the way an organization is structured and managed, as well as its roles, responsibilities, and systems of authority and communication, is well defined and supports its overall strategy and operating model. There is no best practice way to structure any organization. Organizations exist to support their mission and vision so the structure of the organization will vary depending on the goals of goals and strategy of the organization.

Definition: Culture“A set of values that is shared by a group of people, including expectations about how people should behave, ideas, beliefs, and practices.”*

Culture can be defined as the collective norms, rituals, and behaviors that a group of people share.

Culture includes:• Shared values• Leaders champion and advocate the values• Communication• Trust & Transparency

Organizations are made up of people. Organizations will structure themselves in such a way that the people and their skills or competencies support the overall goal objective of the organization. As technology advances there is a ever present ongoing need for people to maintain and update their skills or competencies in support of the organization.


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Information and Technology

The second of the Four Dimensions of Service Management is Information and Technology. The service provider will use the information technology to support the objectives of the organization and this information and knowledge will be necessary for the management of services as well as the individual components of the technologies required to support the delivery of services.

IT services rely very heavily on information management. The IT service should support the facilitation of the customer’s desired business outcome, many times this business outcome is the management of information. Organizations will rely on information and knowledge for making well-informed decisions regarding service provisioning.

For many services, information management is a primary means of enabling customer value. Information management criteria:

• Availability: Is the information available when needed by customers and users?

• Reliability: How reliable is the service that is delivering and storing the information needed?

• Accessibility: How do users access the information?, When can users access the information?

• Timeliness: Information needs to be delivered in a timely manner for making well-informed decisions.

• Accuracy: Customers and users will rely on the information to be accurate for making well-informed decisions

• Relevance: Current up-to-date information is critical for customers and users.

The challenge of information management, such as those presented by security and regulatory compliance requirements, is also a focus of this dimension.

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Partners and Suppliers

Every organization is reliant to some extent on services provided by external organizations. These external organizations can be referred to as partners and/or suppliers. The third dimension of service management, Partners and Suppliers, focuses on the organization’s relationship with other organizations that are involved in the provision of services. Any external organization that supports the service provider’s delivery of services can be thought of as a partner and/or supplier. When we have an agreement with an external organization that agreement is referred to as a legally binding contract.

The organization’s supplier strategy should be based on its goals, culture and business environment. Some organizations believe that it’s important to maintain control over all aspects or as many of the aspects of service as they can. Other organizations believe that they should focus only on their core competencies and outsource to partners and suppliers those items of that are not part of their core competencies.

Factors that will influence the organization’s supplier strategy can include:

Strategicfocus: Some organizations may prefer to focus on their core competency others prefer to be as self-sufficient as possible

Corporateculture: Organizations may have a historical preference for in sourcing or outsourcing and this can be part of the corporate culture of the organization.(shared attitude and values)

Resourcescarcity: Many times skills necessary are in short supply. If it is difficult to find the skills internally, it may be required by the organization to seek the skills externally from partners and or suppliers.

Costconcerns: Efficiency is always of a big concern for organizations and the decision to in-source or outsource may come down to a consideration of the cost of performing particular activities.

Subjectmatterexpertise: Very similar to resource scarcity, an organization may seek to seek services outside based on subject matter expertise that may not be available in house.

Externalconstraints: Regulations, policy and industry practices will impact in organizations supplier policy.

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Demandpatterns: It is very common for seasonal peaks to be managed using partners and suppliers. It may not be economical for the service provider to build the infrastructure necessary to cope with large variations in demand.

The final of the Four Dimensions of Service Management are Value Streams and Processes. Value Streams and Processes define the activities, workflows, controls and procedures needed to achieve agreed objectives.

Definition: Value StreamA value stream is a series of steps an organization undertakes to create and deliver products and services to consumers.*

This dimension is focused on working in an integrated and coordinated fashion to ensure the co-creation of value through the delivery of products and services.Value streams help organizations map how they perform the work and document the steps an organization undertakes in the creation of value. Well-documented value streams and processes will allow an organization to identify the difference between value-added and non-value add activities. The identification of non-value adding activities is an area of focus for continual improvement.

A value stream should be defined by the organization for each of their products and services to help identify and document the activities performed in the creation of those products and services. These value streams will be continually improved. The well-defined value stream once documented can be easily modified in the case that a new product or services required. Organizations should seek to reuse existing value streams that work well for the organization.

Value streams are specific ways to work through the Service Value Chain. A Value stream is a series of steps an organization undertakes to create and deliver products and services to service consumers. It combines the organization’s value chain activities. Value stream optimization may include process automation or adoption of emerging technologies and ways of work to gain efficiency or enhance user experience.


36 * Copyright © AXELOS Limited, Used under permission of AXELOS Limited. All rights reserved

Definition: ProcessA process is a set of interrelated or interacting activities that transform inputs into outputs. Processes are designed to accomplish a specific objective.*

Processes are the series of actions undertaken to transform the defined inputs into defined outputs.

A process defines the repeatable set of activities that the service provider will perform regularly. A business process is simply how an organization does its work. The business process is the set of business activities the business pursues to accomplish a particular objective for a particular customer, either internal or external. Processes may be large and cross-functional, such as Business Relationship Management, or relatively narrow, like an order entry activity.

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The Guiding Principles

There were 9 guiding principles as part of the 2016 ITIL® Practitioner publication. The 9 guiding principles have bee consolidated and updated into the ITIL® guiding principles as part of ITIL® version 4. These guiding principles have been integrated into in the core ITIL® framework of the ITIL® Service Value System.

“A Guiding principle is a recommendation that guides an organization in ALL circumstances.” *

There should be a set of principles for all organizations. These guiding principles should be adopted by organizations and then and adapted to meet specific needs and circumstances.

The guiding principles can guide an organization in all circumstances. A personal example of a guiding principles is: “treat others like you would like to be treated yourself”. This basic logical construct is a principle that all should follow in all aspects of life.

A guiding principle is a recommendation that guides an organization in ALL circumstances from strategic to all levels in the organization.


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The Guiding Principles can be used to guide an organization in their work as they adopt a service management approach and adapt ITIL® guidance to their own specific needs and circumstances. The Guiding Principles allow organizations to integrate the use of multiple methods into an overall approach for service management. The Guiding Principles are universally applicable to any initiative.

For example, the first principle, Focus on Value, can (and should) be applied to all relevant stakeholders and respective definitions of value, not only to service consumers.

Organizations should not use only one or two of the principles, but should consider the relevance of each of them and how they apply together. Not all principles will be critical in every situation, but they should all be reviewed on each occasion to determine how appropriate they can be in that situation.

The Guiding Principles encourage and support organizations in continual improvement at all levels. They are universally applicable to nearly any initiative and to relationships with all stakeholder groups.

All of the Guiding Principles are equally important. All situations are different and some of the Guiding Principles will apply more in certain circumstances than other of the Guiding Principles. The Guiding Principles are part of the core of the Service Value System. There are seven key Guiding Principles.

The seven Guiding Principles are as follows:

• Focus on value• Start where you are• Progress iteratively with feedback• Collaborate and promote visibility• Thinking work holistically• Keep it simple and practical• Optimize and automate

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Focus on ValueThe first of the ITIL® Guiding Principles we will discuss is Focus on Value.

Organizations should focus on value that is provided not only to itself but to all other stakeholders associated with the delivery of services. Value should be co-created for the customer, the consumer, the service provider, suppliers and any other stakeholder involved. If an organization focuses on value for the service provider only, the customer may not realize value from the services that are being offered. If the service provider focuses on value only to the customer and doesn’t focus on its own bottom line, the service provider may not be in business very long.

The focusing on the value should be a Win-Win situation for all stakeholders. In the delivery of services the service provider should receive value for the services they deliver. The customer should also receive value from utilizing the service that facilitates their desired business outcomes.

Every activity that the organization undertakes should link directly back to value. Once again, value is co-created and we are focusing on value for the service provider, the customer and other stakeholders. If the activities are not adding value to one of the stakeholders, the service provider should review those activities and stop performing activities that don’t add value.

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To ensure a Focus on Value approach, the service provider should start with the following activities:

UnderstandandidentifytheserviceconsumerFirst and foremost the service provider should understand who is the service consumer for the products or services that service provider delivers. As value is perceived from the consumer’s perspective. Value is in the eye of the beholder. The service provider needs to understand which of the stakeholders will receive value and how that value will be perceived by each stakeholder.

Understandtheconsumer’sperspectiveofvalueIn understanding the consumer’s perspective of value the service for provider must understand first off who the consumer is, but also why the consumer is utilizing the service. What are the consumer’s desired business outcomes that will be facilitated by using the service? How does the service help the consumer achieve their goals?

Value should exceed cost. If cost exceeds the perception of value there is something wrong with that situation. The service provider needs to understand the role that cost plays in the customer’s determination of value.

Risk can be thought of as a component of value as risk will distract from the customer’s perception of value. The service provider needs understand the perceived risks that might be undertaken by the service consumer. The service provider will need to map value to intended outcomes. These consumer outcomes will change over time.

Understandthecustomerexperience(CX)andoruserexperience(UX)As value is perceived by the customer, the experience that the service consumer has when they interact with the service as a direct affect on the perceived value of the service by the customer.

The objectives of the customer and the user may be different and therefore the service provider will need to differentiate and understand both the customer experience (CX) and the user experience (UX) from utilizing the service.

These activities can help service provider understand which service activities add value and which service activities do not add value.

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Start where you AreWhen engaged in any important initiative, do not start without first considering what is already available to be leveraged. Decisions on how to proceed should be based on accurate information obtained through direct observation supported by appropriate and effective measurement.

Measurement should be used to support the analysis of what has been observed rather than to replace it. Over-reliance on data analytics and reporting can introduce bias and risks in decision-making. The act of measuring can affect the results.

It is very rare that an entire system or process has to be scrapped and re-built from the ground up. It is extremely important that the service provider understand the current state of performance for a service or process.

A process assessment can aid the service provider by identifying any gaps between the service provider’s documented processes and frameworks such as ITIL®. The assessment can also identify gaps from the service provider’s documented process and actual activities being performed. The identification of gaps of actual activities being performed is done through interviews and observations at the customer site by an experienced IT service management professional.

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In applying the guiding principle of Start Where you Are, the first step will be to look at what exists as objectively as possible. Often third-party assessments are performed to provide the objectivity necessary to diminish any bias towards measuring and analyzing the data. Internal assessments can be performed but have some risk of bias being injected into the results. One way to minimize the bias during an internal assessment is to follow the rule “do not audit your own work”. For example the incident manager can audit the Change Enablement practice and the change manager can audit the Incident Management practice.

Another aspect of Start Where you Are is reusing successful processes, practices and procedures. The service provider should determine if successful practices and procedures in one area can be replicated or expanded to other areas. This reuse minimizes the need to reinvent the wheel. Successful practices can often be adapted to other practice areas thus minimizing the amount of rework in the redesign of a practice or service.

The service provider should apply risk management skills in the decision-making process on whether to bring forward the successful process of practice and procedures into expanded areas or other practices. These new practices can introduce risks in other areas that did not apply in the original practice or service. There is also risk of following existing practices without analyzing intended and unintended consequences if expanded into new areas.

It may be rare, but it is possible that sometimes nothing from the current environment can be reused. This would mandate a full analysis and redesign of any service or practice going forward. The way to identify that nothing from the current environment can be reused would be to perform an assessment and analyze the intended and unintended results from the existing design in the current environment compared to the new design for the new environment.

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Progress Iteratively with FeedbackWorking in a time boxed, iterative manner with feedback loops embedded into the process allow for greater flexibility, faster response to customer and business needs, the ability to discover and respond to failure earlier, and an overall improvement in quality.

Continual improvement activities of the service providers should organize work into smaller, more manageable units. Project management frameworks refer to this as creating a work breakdown structure (WBS). The service provider should define the major deliverables of the improvement method and break the activities into smaller manageable work packages. This can allow for:

• Sequential or simultaneous activities • More manageable activities• Ongoing tangible results• Work completed in a timely manner• Iterations can be built on to create future improvements

A feedback loop is defined as a situation where part of the output of an activity is used as an input to control the activities. We can learn from previous iterations through a process and then adjust the activities within the process based on the results of prior iterations through the process.

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We are all very familiar with feedback surveys. This will be a survey in which a organization for which we’ve done business with sends out a survey and asks for our input. The results of these customer surveys can and are often used to improve the service provider’s performance. The results of customer satisfaction surveys are often an input into the practice of continual improvement. The service provider should not just seek feedback but also use the feedback and apply it to their products and services, internal processes and practices.

The ecosystem or the business environment in which the customer and the service provider operate are constantly changing. Feedback is essential to ensure the service provider is progressing forward and not backwards.

Feedback loops can be very have a very short duration or a long duration. The service provider will need to adjust their process and procedures according to the needs of their customers. This may mean the customer has feedback and the service provider is agile enough to modify their product or service based on feedback of the customer quickly. All service providers should review feedback of their products and services over a long period of time to help identify opportunities for improvement that could then be logged into the continual improvement register.

Feedback loops between participants in the Service Value Chain help them understand where work comes from, where outputs go and how their actions affect the stakeholder outcomes.

The service provider should avoid paralysis by analysis. The service provider should have a good understanding of the big picture view of the whole system (holistic) and not get bogged down in trying to measure every single detail before attempting any improvements. Attempting to measure every minute detail can lead to or cause paralysis by analysis. The feedback system will provide information to the service provider to help them understand whether they’re moving closer to their goals or further away from their goals.

Fast does not mean incomplete. The service provider should be up-to-date on feedback and respond quickly to feedback. The key to responding quickly is to understand your processes and understand how changes to your processes will affect performance.

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Collaborate and Promote Visibility

When initiatives involve the right people in the correct roles, improvement efforts benefit from better buy-in, greater relevance and increased likelihood of long-term success. To make sure we include the right people and collaborate and promote visibility we first must identify the stakeholders involved. Collaboration includes:

• Information sharing• Understanding• Trust• Real accomplishment

InformationsharingCollaboration and cooperation generally provide better results than work done in isolation. It is generally better to include stakeholders than to exclude the stakeholders. Not sharing information can lead to groups working in silos fulfilling only a very narrow or specific need of the organization. Proper collaboration and information sharing will help to break down the barriers between the silos and allow the organization to work as a whole and take a more holistic approach.

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UnderstandingThe first step in understanding is to identify the stakeholders. As a service provider we need to understand and identify the different stakeholder groups that have an interest in the services that are being delivered. Stakeholders can be both internal and external to the organization.

Customers are an obvious stakeholder that comes to the forefront of our attention when thinking about stakeholders. As an IT service provider our goal is to facilitate the customer’s desired business outcomes.

Service sponsors are interested in the overall performance of the organization and will sponsor services that support the overall goals of the organization. Sponsors generally fund or pay for the services while customers define the requirements.

End users consume the resources generally on behalf of the customers and sponsors. The end user requirements should be considered and filtered by those that are defining the requirements and funding the service.

Other stakeholders can include developers, both internal and external. Developers generally work with the internal teams to ensure that the applications and services are working efficiently and effectively while meeting the requirements defined by the customers.

Suppliers are stakeholders that provide goods and services to the service provider to facilitate the service provider’s delivery of services to their customers.

TrustThere needs to be a culture of trust between stakeholders. As a service provider, we should act as a trusted advisor for customers to ensure our customers feel that decisions that we make are in the customer’s best interest and not solely in the service provider’s interest. Value should be co-created between the service provider and the consumers. The service provider cannot work in a one-sided (win - lose) approach. Working on behalf of the customer will provide benefits of improving the trust in the relationship between service provider and the customer.

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RealaccomplishmentOne part of the necessary messaging to stakeholders is to demonstrate real accomplishments. Generally for the delivery of services and service management processes there will be stakeholders that are reluctant to buy-in to new processes, procedures or new services. One way to win over these reluctant stakeholders is to show real accomplishment of progression towards organizational goals. Rarely does a project deliver its expected results in less than a week. On long organizational change projects that may take months and years, it is important to demonstrate along the way any accomplishments or quick wins to show that there is value in proceeding with the improvement initiative.

Visibility of progression towards organizational goals is an important topic to ensure trust and buy-in on the improvement initiative. Another aspect of communication and collaboration will be to instill a sense of urgency through the visibility or transparency of the improvement initiative. Generally organizational team members will prioritize their work around the priorities of the organization as a whole.

Insufficient visibility leads to lack of understanding the urgency and the improvement program. Promoting the visibility and communicating the progress will allow the organization to drive difficult improvement initiatives that are likely to have positive impact on organizational results. This can be done through activities such as:

• Documenting and communicating the flow of work in progress• Identifying bottlenecks caused by capacity issues• Addressing any non-value-added activities and waste.

One of the reasons we promote visibility is to get buy-in on improvement initiatives for process improvement or service improvement. One of the key rules is that collaboration does not mean consensus. We want to collaborate with stakeholders but if we had to wait to come up with a solution that everybody agrees, this would not be a very good solution in the long run. While trying to make everyone happy with a consensus solution, it is more than likely nothing effective will be produced. No real accomplishment.

The act of collaboration does not mean that there has to be a consensus with all stakeholders. As with any management decision, a good manager will take feedback from all stakeholders prior to making a decision. There will be a select team that will make the final decision based on recommendation from the stakeholders.

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Think and Work HolisticallyA service provider needs to develop a holistic approach to service management that requires an understanding of how all the parts of the organization work together in an integrated way.*

The service provider will address all Four Dimensions of Service Management. In order to ensure holistic thinking the service provider must understand the four dimensions and consider these four areas in the decision-making process. The Four Dimensions of Service Management are:

1. Organizations and People2. Information Technology3. Partners and Suppliers4. Value Streams and Processes

Service providers need to understand the full Service Value Chain in the performance of activities in order to transform demand into value. The Service Value Chain contains the end-to-end activities needed to transform demand into value for all stakeholders.


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The service provider will consider the following in application of the guiding principle of Think and Work Holistically:

RecognizethecomplexityofsystemsServices and systems are complex and this complexity needs to be understood how services and systems interact with one another. Any modifications or improvements to one service or system can have an adverse effect on other services or systems. The service provider will need to understand the inter-action and interrelationships of the services and systems to Think and Work Holistically.

Collaborationiskeytothinkingandworkingholistically.In order to have an appreciation of the bigger picture, the service provider will need to communicate and collaborate with stakeholders throughout the organization. Collaboration with stakeholders will ensure that the service provider understands the bigger picture and can be thinking and working holistically as opposed to narrowly focusing in isolated silos.

Wherepossible,lookforpatternsofinteractionbetweensystemelementsThe service provider will need to understand the patterns of business activity and how they drive patterns of demand for IT services. By understanding the patterns of interaction between elements and systems the service provider can look at the broader picture and understand holistically how one system will interact with other systems.

Automationcanfacilitateworkingholistically.Automation can support the end-to-end visibility of services and systems and provide a mechanism for measurement that can be used by the service provider to Think and Work Holistically.

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Keep it Simple and Practical

The guiding principle of Keep it Simple and Practical reminds us that the minimum number of steps should be used to accomplish an objective. Trying to provide a solution that considers and handles every exception will lead to a very complex and overly complicated process. The simple adage of KISS (keep it super simple) is often ignored, resulting in overly complex methods that don’t help us achieve our objectives or minimize the utilization of resources in the achievement of those objectives.

The concept of analyzing a business process for efficiency has been around forever. In manufacturing it was very common for time and motion studies that would develop quantitative data where an expert external observer documented the time for the duration for activities with the specific objective of simplifying or speeding up the end objective of the process.

The concept of searching for efficiency and eliminating non-value added activities is not new but has not been well-established within IT organizations. The service provider should analyze that each step in the process should add value towards creating the outcome desired of the process.

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Activities in the process that do not help or facilitate the objective of the process, should be analyzed, reworked and in some cases removed from the process. When designing or improving service management, it is better to start with an uncomplicated approach and then carefully add controls, activities, or metrics when it is seen that they are truly needed.

In applying the principle of Keep it Simple and Practical the following items are important:

EnsurevalueEvery activity should contribute to the creation of value. Eliminate activities that do not add value.

SimplicityistheultimatesophisticationIt may seem harder to simplify, but is often more effective.

Dofewerthings,butdothembetterMinimizing activities to include only those with value for one or more stakeholders will allow more focus on the quality of those actions.

RespectthetimeofthepeopleinvolvedA process that is too complicated and bureaucratic is a poor use of the time of people involved.

Easiertounderstand,morelikelytoadoptTo embed a practice, make sure is easy to follow.

SimplicityisthebestroutetoachievingquickwinsWhether any project, or when improving daily operational activities, quick-wins allow organizations to demonstrate progress and manage stakeholder expectations. Working in an iterative way with feedback will quickly deliver incremental value at regular intervals.

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Technology can help an organization scale up to meet demand on repetitive tasks allowing the service provider staff to focus on more complex issues and complicated decision-making. Automation and optimization provides the means to make an activity or process more effective. The activity must first be simplified before automated and consider the financial, regulatory compliance, time constraints and also resource availability in deciding what and how to automate. Automation may increase the speed of specific activities, but the cost of that automation may outweigh the benefit of the increased speed.

ITIL® primarily focuses on optimization through continual improvement that relies heavily on measurement and reporting to support this optimization. Other frameworks such as Lean, Kanban also focus on optimization. Regardless of the framework there are some high-level steps that will be applied that can lead to optimization:

• Understand and agree the context in which the proposed optimization exists

• Assess the current state of the proposed optimization• Agree with the future state and priorities of the organization should be,

focusing on simplification and value• Ensure the optimization as the appropriate level stakeholder engagement

and commitment• Execute the improvements in an iterative way• Continually monitor the impact of the optimization

Optimize and Automate

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Automation generally refers to the utilization of technology to perform or to support the performance of an activity with little or no interaction from the service provider staff. Automation should be applied across the organization first though looking to automate those tasks that have been standardized and repetitive. Focusing on the standard and repetitive tasks to reduce organizational costs and reduce human error.

One of the key elements of automation is the concept of simplifying the process before automating. The concept of garbage in garbage out should have us think about having an improved simplified process prior to automation. Beginning approaches in automation and organization should start with standardization of repetitive tasks and to defer complex activities until those activities have been well-documented and simplified prior to automation.

The service provider must define the metrics that will be used to determine whether an optimization or automation activity has been successful. We must understand what the objective looks like prior to automation. These metrics will be used to create a baseline as a starting point to measure the achievements or improvements of optimization and automation.

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The Service Value SystemThe ITIL® Framework is built upon the Service Value System.

Definition: SystemA combination of interacting elements organized and maintained to achieve one or more stated purposes.*

The ITIL® Service Value System describes how all the components and activities of the organization work together as a system to enable value creation Through the delivery of IT services. The ITIL® Service Value System has been designed to enable flexibility and discourage siloed working.

The purpose of the Service Value System (SVS) is to ensure that the organization continually co-creates value with all stakeholders through the use of products and services. Emphasis of all stakeholders not just the customer.*


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The Service Value System starts with the Demand. The core of the Service Value System is the Service Value Chain.

Surrounding the Service Value Chain are:• Guiding Principles• Governance• Practices• Continual Improvement

This should lead to value being co-created at the organizational level for all stakeholders.

The first components of the Service Value System is the Opportunity / Demand. Opportunities are options or possibilities to add value to stakeholders. Demand is the expression of the need or desires of the existing products and services by existing stakeholders

New service would fall under OpportunityExisting services fall under Demand

The outcome of the Service Value System is value. The Service Value System can enable the creation of many different types of value for a wide group of stakeholders.

The value for customers, suppliers, for the organization, for shareholders. Not just customer value.

Definition: Demand Demand is the need or desire for products and services among internal and external consumers.*

Definition: OpportunityOpportunities represent options or possibilities to add value for stakeholders or otherwise improve the organization.*


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The core of the Service Value System is the ITIL® Service Value Chain. The Service Value Chain is an operational model for the creation, delivery and continual improvement of services. The Service Value Chain is a flexible series of six key activities that can be performed in a flexible sequence that is appropriate for each practice. The Service Value Chain activities are iterative, meaning that activities can be performed in a sequence and have iterations that go back and forth between different activities for further elaboration or additional contact with the stakeholders involved in the activity.

The Service Value Chain activities can be sequenced for the needs of any Management practice within an organization as needed. The activities are not necessarily to be perceived as a typical waterfall approach to performing a defined set of activities.

Each practice will define service value streams that are defined as a set of Service Value Chain activities to achieve a specific outcome. Each practice will combine Service Value Chain activities together to turn demand into value.

The Guiding PrinciplesThe top of the Service Value System diagram contains the ITIL® Guiding principles. These were covered in a previous section.

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GovernanceGovernance is the single overarching area that ties IT and the business together, and policies are one way of ensuring that the organization is able to execute that governance. Governance is what defines the common directions, policies and rules that both the business and IT use to conduct business.

Governance ensures that policies and strategy are actually Implemented, and that required processes are correctly followed. Governance includes defining roles and responsibilities, measuring and reporting, and taking actions to resolve any issues identified.

Every organization has a person or group that has overall accountability at the highest level for the performance of the organization against organizational goals and also for any regulatory items that the organization has to ensure compliance.

The governing body of an organization may be a Board of Directors or managers. These organizational leaders are accountable for compliance with policies and any external regulations. The governing body maintains oversight of the Service Value System.

Governance is the responsibility of the both the business and IT to ensure that there is proper governance over IT. Governance will provide common policies and directions that will be followed throughout the organization.

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Service Value ChainThe Service Value Chain is a central element of the Service Value System, an operating model which outlines the key activities required to respond to demand and facilitate value creation through the creation and management of products and services.

The Service Value Chain is a set of interconnected activities that an organization performs in order to deliver a valuable product or service to its consumers and to facilitate value realization.*

There are six Service Value Chain activities

• Plan• Improve• Engage• Obtain/Build• Design & Transition• Deliver & Support

Products and Services is an output of the activities in the Service Value ChainDemand and Value are not activities of the Service Value Chain. The activities performed as part of the practices are not performed in a linear sequence of activities.


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Management PracticesThe Management Practices evolved from ITIL® processes. These Management Practices can include ITIL® 3 functions. These practices work across the Service Value System.

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ContinualImprovementModel

ITIL® requires the organization to focus on improvement of all aspects of the Service Value System. Organizations should look to continually improve the way it operates, either more effective, efficient, manage better, and greater facilitation co-creation of value. Continual Improvement should be a philosophy for a way of working.

A very important item in ITIL® is the concept of Continual Improvement. There is nothing in our environment that cannot be improved. The question is “Is there value in the improvement?”. If there is value in the improvement opportunity then the improvement should proceed. If there is not value at this present time, then the improvement opportunity should be put on hold until the value justifies the investment in the improvement initiative.

The Continual Improvement Model represents a structured approach for improvement and alignment with customer expectations. Service providers who deliver upon customer expectations will be successful. Those who disappoint customers will fail. It does not matter how well something is done, or even how cost-effective, if the delivered product doesn’t meet the customer’s need or expectation.

Note: Continual Improvement should be embedded in all Service Value Chain activities.

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The Service Value ChainEach of the Service Value Chain activities represent the steps an organization takes in the creation of value. Each activity contributes to the value chain by transforming specific inputs into outputs.

The Service Value Chain activities use different combinations of ITIL® practices to convert inputs into outputs. Each activity may draw upon internal or third party resources, processes, skills and competencies from one or more practices.

Each of the Service Value Chain activities will have inputs, the Service Value Chain activity will use the resources of the practices in the execution of the activity and create outputs. The activities of the Service Value Chain will use different combination of the practices.

“The Service Value Chain outlines key activities required to respond to demand and facilitate value realization through the creation and management of products and services.” *


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These activities within the service value chain are the steps an organization takes to create value. Each of the activities takes defined inputs and creates defined outputs that will be used by another activity. All of the activities within the Service Value Chain are interconnected with interaction and triggers that can initiate other Service Value Chain activities.

The six Service Value Chain activities are:• Plan• Improve• Engage• Design and transition• Obtain/build• Deliver and support

Definition: Value StreamA series of steps an organization undertakes to create and deliver products and services to consumers.*

A value stream is a specific combination of Service Value Chain activities in response to a particular situation. A value stream will be a formal documented approach to guide the activities in resolving or completing the desired outcome for a particular scenario.

An example of a value stream could be an incident resolution. The incident resolution value stream can began with engagement where the end-user contacts the service desk. The service desk documents the issue in an incident record. The next activity in this value strain will may be Deliver and Support where a technician goes to the end user’s desktop and resolves the issue. The service desk could then follow up through the engage activity to contact the end-user for a satisfaction survey.

This value stream example will be the formalized documented approach for handling a particular type of incident. Different incident types will have different value streams associated with the different service value chain activities necessary to achieve the scenario objective.

Value streams often begins with engagement. The service value chain activity of Engage allows a continual and good relationship with all stakeholders. This can be thought of as the communication activity of the Service Value Chain.

The central cube of activities (Obtain / Build, Design & Transition, Deliver & Support) can inter-operate in any sequence appropriate, activities within the Service Value Chain can be repeated and as flexible as required.


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There are feedback loops between all activities in the Service Value Chain and Improve. There is a feedback line from Value back to Demand. The perceived value drives the demand of the organization’s products and services

Plan and Improve activities cover all activities and overlap the Service Value Chain activities in the diagram.

NotesregardingServiceValueChainActivities

All incoming and out coming interactions with parties external to the service provider are performed via Engage value chain activity.

All new resources are obtained through the Obtain/Build activity.

Planning at all levels is performed via Plan activity.

Improvements at all levels are initiated and managed via Improve activity.

Creation, modification, delivery, maintenance and support of component, product and services are performed in integrated and coordinated way between Design and Transition, Obtain/Build and Deliver and Support activities.

Products and Services, Demand and Value are NOT value chain activities, they are Service Value System components.

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The ITIL® Strategist: Direct, Plan & Improve (DPI) course focuses on the Plan and Improve activities of the ITIL® Service Value Chain. The Plan and Improve are the portions of the Service Value Chain activities that are covered in the this course. The Direct part of this course comes from Governance which is part of the overall Service Value System.

Learning objectives from the Direct, Plan & Improve course include:• Understand the key concepts of Direct, Plan & Improve • Understand the scope of what is to be directed and/or planned, and know

how to use key principles and methods of direction and planning in that context

• Understand the role of Governance, Risk and Compliance (GRC) and know how to integrate the principles and methods into the service value system

• Understand and know how to use the key principles and methods of continual improvement for all types of improvements

• Understand and know how to use the key principles and methods of communication and organizational change management to direction, planning and improvement

• Understand and know how to use the key principles and methods of measurement and reporting in direction, planning and improvement

• Understand and know how to direct, plan and improve value streams and practices

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Definition: StrategyA broad approach or course of action defined by an organization for achieving its objectives.*

Definition: TacticsThe specific methods by which a strategy is enacted.*

Strategies are defined in all levels within the organization to achieve the objectives of each of those levels or organizational units. Strategy supporting the objectives must be cascaded to ensure alignment with overall organizational objectives. Strategy can be defined at multiple levels but must cascade and be tied to objectives of the whole organization.

Tactics can be altered or modified when necessary. Tactics often include the standardized and proceduralized ways of performing activities.

Operations may include repetitive work and well-known predictable procedures. Operations also manages unique situations that may occur during normal operations. These unique situations are referred to as exceptions.

Definition: Operation The routine running and management of an activity, product, service or other configuration item.*


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The vision is part of the organizational mechanism for defining the direction of where the organization wants to be in the future. The vision is an important part that demonstrates to stakeholders the image of the future state. The vision allows stakeholders to understand why an organization performs certain activities the way it does.

Most organizations will define formal mission statements to articulate their purpose intentions. All activities of the organization should be aimed at fulfilling the mission of the organization through specific initiatives to achieve the objectives of the mission.

Organizations such as NASA provides very clear and concise examples of vision and mission statements.

The vision for NASA is: “We reach for new heights and reveal the unknown for the benefit of humankind.”

NASA’s stated mission is: “Drive advances in science, technology, Aeronautics, and space exploration to enhance knowledge, education, innovation, economic vitality and stewardship of earth.”

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Definition: Direction Leading, conducting, or guiding someone or ordering something. Setting and communicating vision, purpose, objectives, and guiding principles for an organization or team. It may include leading or guiding the organization or team towards the objectives.*

Direction clarifies the expected outcomes and can help create and shape the action plan necessary to drive the organization towards those desired outcomes. The ITIL® Guiding Principles should be applied during the activity of direction. Direction is part of governance of the organization: Evaluate, Direct and Monitor. It is essential to have a clear understanding of and direction clarifies the expected outcomes of all stakeholders. Good direction requires an explanation of the mission and two-way communication to ensure that the mission is understood.

Direction should have sufficient clarity to alleviate any ambiguity about what is desired while allowing for flexibility for people to make decisions and be creative while working towards the objectives.

There should be someone, or a role, at the appropriate level of authority to direct the organization and team.

Definition: PlanningPlanning is arranging a method of achieving in and or creating a detailed program of action.*

Planning should be done at the correct level of detail. Too much planning can cause delay and ambiguity on how to deal with unexpected if it has been planned for. Too little planning can result in rework and waste.

The plan is a method or technique that will determine how an organization will progress towards an objective. Planning is very important. Plans can improve the coordination of activities within an organization to achieve the organizational objectives. Plans help avoid waste and reduce risk.

Plans can be thought of as a program of actions. These actions are arranged to achieve an end.


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Caution with planning as planning every conceivable detail of an initiative tends to be too prescriptive and delays actions. Not every contingency can be planned for, therefore it is important have specific guidelines for these contingencies. On the other extent not enough planning might have staff beginning work that can result in rework and wasted effort due to mistakes that could’ve been avoided.

Plans give people a clear sequenced set of actions to be performed to achieve objectives as part of an initiative. Plans must be continually reevaluated and adjusted as the work is performed and the results are measured.

Planning should be performed at strategic, tactical and operational levels within the organization. Planning is an attempt to increase order and reduce risk. Risk cannot be eliminated entirely no matter how much planning is done. Risks should be identified and plans created to respond if these risks occur.

Definition: ImprovementA deliberately introduced change that results in increased value for one or more stakeholders.*


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Everything in an organization can be improved. The scope of the improvement can be the entire IT service management as a program. This includes the entire Service Value System. All aspects or dimensions relating to an organization can be improved. Improvements can be applied to the Four Dimensions of Service Management:

• Organizations and People • Information & Technology • Partners & Suppliers • Value Streams & Processes

Organizations are constantly improving. Improvement relies on comparing and measuring the current state to the future state. Improvements drive changes. These changes to the current state should lead to enhanced outcomes for one or more of the stakeholders.

One important concept about improvement is that everything can be improved but the improvement should add value. Just because we can improve something doesn’t mean that we should improve if there is not sufficient value at the time.

Everyone in the organization is responsible for improvement. Everyone can identify opportunities for improvement and make recommendations on how these improvement initiatives can be implemented.

Improvement requires some level of change. Larger improvements may require Organizational Change Management (OCM) to be involved for the people side of the change. Change Enablement will be involved for the products and services aspect of the change.

From the guiding principle of Start Where You Are, we understand that it is rare to start from scratch or nothing. The guiding principle of Start Where You Are requires an objective assessment of the organization’s current state prior to performing any activities to achieve a desired or future state. Generally improvements are performed after assessing the current capabilities and then identifying ways to perform at a higher level.

Measurement provides a means of objectively quantifying information. This information is generally used for making decisions. Measurement is the starting point for improvement activities throughout the organization. The role of measurement also provides information to allow predictions of performance to occur. This measurement can influence planning. Measurement is the beginning of good decision-making not the end.

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Definition: OperationThe routine running and management of an activity, product, service, or other configuration item.*

Operational procedures should be well documented and are typically followed by staff. Generally there are agreed methods and techniques for each of the operational activities.

Definition: Operating ModelA conceptual and or visual representation of how an organization co-creates value with its customers and other stakeholders, as well as how the organization runs itself.*

An operational model is a representation of the complex structures and dynamics of a workflow to create and co-create value for stakeholders. Operating models simplify complex systems into more easily understood subsystems. These subsystems can then be managed more easily. Determining the operating model is part of strategic planning.

An operating model facilitates the organization’s ability to visualize and examine complex structures. These structures can be divided into systems and further into simpler sub-systems.

The ITIL® Service Value Chain is an operating model that covers the activities to create, deliver and manage products and services that therefore enable the co-creation of value.

Definition: MethodA method is a way, technique, or process of doing something. Methods are structured and systematic.*

A method is a technique of how a service provider performs an activity. These methods also can include tools and processes. The methods provide structure and a systematic approach to performing work.

Organizations should choose the methods that work well for that organization. There are multiple methods that an organization can use depending on the type of work activity that is being performed.


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Problem management methods that you may be familiar with include:• Kepner Tregoe• Pareto• Ishikawa• Component failure impact analysis• Fault tree analysis• Service failure analysis

Definition: RiskA possible event that could cause harm or loss, or make it more difficult to achieve objectives.*

Many frameworks, both service management and project management frameworks, take the approach on risk as risk being a level of uncertainty. Risk is a possible event. For most frameworks a good risk is referred to as an opportunity and a bad risk is referred to as a threat. ITIL® refers to risk as a threat that could cause harm or loss.


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The service provider will assume the risks of delivering the service. These specific risks are removed from the customer and transferred to the service provider. The service provider assumes the risk as part of the service offering.

For example: I hire someone to maintain my yard. I could maintain my yard myself and this would include the maintenance and upkeep of a lawnmower. By subscribing to a yard maintenance service, any risk of the lawnmower failing is the responsibility of the service provider and not mine, as the customer. As a customer I pay for a service and the service provider will handle any of the specific costs and risks associated with the service offering and the delivery of the service.

The customer can contribute the reduction of risk by defining the service requirements and the specific required outcomes that are required from the service that will facilitate the customer’s desired business outcomes. By properly defining the outcomes expected and demanded by the service, the level of negative risk the customer is exposed to can be reduced.

The customer should clearly communicate the expected critical success factors (CSFs) that apply to the delivery of the service or the consumption of the service along with clearly defining and communicating constraints that may limit the service provider in achieving or facilitating the customer’s desired business outcomes.

An important aspect of risk is that risk distracts from value. The perception of risk will be seen as to reduce the perception of value from the consumer’s perspective associated with a service. In the example of buying a used car, an older car may seem riskier as it may be perceived to have the opportunity to fail much more, thus causing the customer to incur repair costs. A newer car may be perceived as less risky because the parts are not as worn and may not be as likely to fail as an older part. All things being equal a newer vehicle will have a greater value than an older vehicle based partially on the perception of risk associated with the product.

Definition: ControlThe means of managing a risk, ensuring that a business objective is achieved, or that a process is followed.*


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Controls can be thought of as safeguards to ensure that the organizational objectives can be achieved. These controls can either prevent issues or allow early detection of anomalies that may interfere with achieving the organization’s objectives.

Definition: Scope of ControlThe area(s) or activities over which a person has the authority to direct the actions of others or define the required outcomes.*

Everyone in an organization has some level of control in their normal activities. This is referred to the scope of control which is somewhat different from the scope of influence.

Scope of control can be mandated by a person’s role in the organization. For example: The role of change manager in an organization has a certain scope of control where they can direct the actions of others as part of the Change Enablement practice.

Individuals with an organization may have scope of control of simply their own activities. Outside the scope of control everyone an organization has the ability to influence others in the organization. This influence could be by making recommendations or providing feedback.


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Every organization has a governing body (governors) or group of people who are accountable at the highest level for the performance of the organization.

Definition: ValueValue is the perceived benefits, usefulness and importance of

something.*Products and services support the achievement of the customer’s desired outcomes while the service provider manages some of the costs and risks associated with the delivery of the service. While the service provider manages and removes some of the cost and risk from the service consumer through the utilization of the service, the service provider also introduces specific new costs and risks.

There is generally a cost imposed by the service provider for utilizing the service. The cost imposed should be balanced by the service consumer with the costs removed from the service consumer through utilizing the service


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Definition: OutcomeAn outcome is a result for a stakeholder enabled by one or more outputs.*

Lawn service exampleI subscribe to a service where someone maintains the yard at my house. The service provider maintains my lawn for a fee. This fee is a cost imposed by the service provider. There are costs removed because I now pay for the service, certain costs I do not incur. I do not have to pay for the maintenance of a lawnmower nor do I have to pay for the fuel for the lawnmower. The maintenance and fuel are costs removed from the service consumer by utilizing the service.


Just as with costs, risks are also imposed as a result of utilizing a service. Risks are also removed from the service consumer from utilizing a service. For the lawn service example: The risk of lawnmower failure is removed from the service consumer (and transfered to the service provider) by subscribing to the lawn maintenance service.

A risk imposed from utilizing a lawn maintenance service could be that the service provider just doesn’t show up. This can be a risk when contracting out work instead of doing it ourselves.

The service provides value to the service consumer only when the perception of value of the cost removed and the risk removed exceed the perception of value of the cost introduced and the risks introduced.

Definition: CostCost is the amount of money spent on a specific activity or resource.*

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The leaders of the organization will define the mission and strategy of the organization. Once the mission strategy are defined further objectives can then cascade down the organizational hierarchy. This will define and help communicate the strategy from upper levels in the organization to lower levels of the organization by defining lower level objectives that support the upper level objectives of the organization.

Objectives at one level of the organization can define the purpose at other levels of the organization. These objectives can be cascaded from the top of the organization down. The metrics and indicators will be evaluated from the bottom of the organization up to the top of the organization. These metrics will roll up or cascade from lower levels to upper levels of the organization.

The cascading of the strategy and objectives will ensure that the organization has aligned in its purpose and objectives at all levels.

The cascading goals, purpose and objective flows down the organizational hierarchy. Performance can be measured at multiple levels from the individual all the way up to the organization including departments and teams. The metrics and measurements support the upward objectives. Individual people and team metrics and measurements will support department metrics. The department metrics will support the business unit metrics. The business unit metrics will then support the overall organizational metrics and objectives.

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The metrics and measurements at each level can be used to define improvement plans to ensure that each level is continually aligning to meet its purpose and objectives and to support the purpose and objectives of the upper levels of the organization.

Requirements for resources also need to be cascading through the organization. In order to achieve the objectives resources will be needed. These resources need to be allocated appropriately to ensure that the goals and objectives can be accomplished.

The requirements and resources can come from any of the Four Dimensions of Service Management.

Organizations & People Information and technology

Partners and suppliers

Value streams and processes

There can be requirements for staffing levels

There can be requirements for technology to accomplish specific goals and objectives

Based on the sourcing strategy resources may come from partners and suppliers for both people and technology

Requirements can exist for the value streams and the activities performed within those value streams and processes.

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The Balanced scorecard considers four perspectives that contribute to the mission and purpose of an organization or department. The balanced scorecard can also be cascaded.

The four areas of a balanced scorecard are broken down into:• Customer• Financial• Internal• Innovation

The concept of the balanced scorecard is that each of the four areas need to be addressed. If the service provider is financially successful but the customers are not satisfied, that financial success may be limited. To achieve better results the customer satisfaction should be high but also the service provider needs a good financial results. Customer satisfaction also might have an impact on the financial performance.

The same with internal and innovation: If the service provider is not innovating and providing updates and imaging services that our customers might leave because they are dissatisfied because the services have not been updated.

There needs to be a balance across these four areas to show how well a service provider is performing.

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Definition: PoliciesPolicies are formally documented statements of management expectations and intentions in relation to a specific area or task. Policies are used to direct actions and decisions, and adherence to policy is mandatory.*

Policies are formal statements of expectation, meaning that the policy will state something that the organization is attempting to establish direction and control. Policies are generally mandatory when established within the proper scope of control and authority for that level of the organization.

Policies typically are established by organizations to direct behavior to avoid undesirable outcomes. Generally policies are established within a particular scope of control for an organization, department or team.

Anexamplepolicy: All changes to products and services must follow the change enablement practice and be authorized prior to implementation.

A policy must be well understood for it to be followed. The policy should be documented and be clear and concise. The objective of the policy should be stated clearly to know why the policy matters to the organization. Policies that do not support the objectives of the organization or are not understood generally will not be followed.

Staff will need to be aware of why the policy is important for them to want to follow the policy. The guiding principle of Keep it Simple and Practical should direct organizations to ensure that policies are easy to follow and that staff know the steps the following policy.

New policies need to be communicated and have support from management and other stakeholder groups that are affected by the policy. Formal training if appropriate should be provided. Policies should have exceptions. Any exceptions to the policies should be documented.

The policy represents the intention of management as part of the governance of the organization but cannot foresee every possible occurrence. Management should also not want to stifle innovation that may require flexibility in applying policies. Consequences of not following policies should be well documented and understood.


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Policies should be measured to evaluate the effectiveness and the compliance towards the policy. Part of this measurement should include feedback from stakeholders. The guiding principle of Collaborate and Promote Visibility should be followed to ensure the people are aware of their feedback being utilized by the policy owners in improving the policies and controls.


Definition: ControlA control is a means of managing a risk, ensuring that a business objective is achieved or that a process is followed.*

Controls are methods or mechanisms that provide an assurance that the objective can be achieved when the process is followed. Control sometimes allow us to detect and correct an undesirable event when it cannot be prevented.

Controls can be policies. The policy is established and the control is to ensure that the objective of the policy is achieved. Controls should align with and support the achievement of high-level objectives of the organization.

Organizationalcontrols can be in the form of policies.Technicalcontrols can be required fields in an applicationPhysicalcontrols could be something that is either physically metered or perhaps an electronic badge to allow or control access.

A control is often automated in workflow management systems that does not allow a work item to progress to the next step until all the activities have been followed and completed. To support a policy that changes will need to be authorized before being implemented: there can be a control in the Change Enablement workflow system that does not allow changes to progress through the process unless they been authorized.

Excessive controls may incentivize staff to try to work around or bypass the controls when the controls are perceived to be overly bureaucratic or impacting other measurable objectives that the stakeholders are concerned about.

Controls exist to ensure that desired results can be achieved. Controls should not be excessive and by creating undesirable consequences. The controls should be measured and reported on to ensure that actions are being controlled and that the objectives of the control are being satisfied.

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If possible the guiding principle of Optimize and Automate should allow controls to use technology to establish controls into the process and procedures. This supports the people executing the activities and ensuring that the policies are being followed through the utilization of the automated controls.

Definition: GuidelinesGuidelines are recommended practices that allow some discretion or leeway in their interpretation, implementation or use.*

ITIL® is an example of a framework that provides a series of guidelines. As a guideline the concepts and principles defined by ITIL® are recommended practices that the organization can adopt and then adapt to their organization.

Guidelines assist staff by making recommendations on how the staff should perform their activities and make decisions. Guidelines can assist people who are unsure how to proceed with an activity.

Guidelines are not requirements, they are recommendations. These recommendations should be followed when people are performing their normal activities or in making decisions around normal activities.

The guiding principle of Keep it Simple and Practical comes into play in that guidelines should be easy to follow and practical. The organization will make sure that the guidelines are simple but yet practical and meet the objectives.

Guidelines provide structure but allow work to be done differently or allow quick adoption of new methods and techniques if needed.

When developing guidelines solicit input from the people who actually do the work. If the guidelines are out of date or incorrect, they will not be followed. The guidelines, just like processes need to be maintained. Feedback should be received and acted upon from the stakeholders and any opportunities for continual improvement should be evaluated appropriately.


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Decisions need to be made at the correct level.

Every organization as a governing body or group of people who are accountable at the highest level for the performance of the organization and its objectives. Governance also is to assure that the policies are implemented processes are being followed. Governance decisions include all levels of the organization.

Governance decisions are made at the highest level of the organization, generally by the board of directors. These decision makers are referred to as governors. Management will execute the policies established by the governors. In public companies the Board of Directors are the governors that establish the policies and objectives of the organization. The CEO is the chief executive officer who is in charge with running the company and following the policies and objectives of the organization. The CEO is hired by, and reports to, the board of directors.

Decisions need be made at the appropriate level and the decision making authority should be as delegated as far as possible. Individuals should be up to make decisions with in their scope of control. The scope of control refers to the scope for which a individual group or team can make decisions about their actions.

Governance is how an organization directs and controls activities to achieve its objectives.*


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When the scope of control is too narrow, decisions are passed the up the organizational hierarchy and can cause bottlenecks and delays. If the scope of control is too broad, then individuals may make decisions that increase risk to the organization.

Organizations will establish controls at different levels. These controls can include:

• Risk management• Financial controls• Operational controls• Compliance controls

No part of an organization governs itself. Organizations will have a governing body that will define strategies, policies and controls for the departments and other parts of the organization. Many of these policies and controls can be delegated to lower levels within the organization based on the appropriate scope of control.

Decisions should be delegated as close to the work as reasonable as long as there are controls and required outcomes are being produced. Staff feels more respected and motivated when they are actually given the ability to make decisions around their daily work and they don’t have to escalate every single decision up the hierarchy to be decided. By delegating the decision authority closer to the work being controlled also avoids any unnecessary delays. If the scope of control is narrow, decisions will be passed up the organizational structure the slowing work and becoming a burden for the decision-makers. This would occur when managers want to micromanage their staff.

Deciding where the proper authority for making decisions resides should also be aligned to the level of risk associated with that decision. The risk tolerance of the organization will play an important role in determining where in the heirachry decisions are made.

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The more risk associated with a decision, the higher in the organizational hierarchy the authority should be delegated. An effective way to assess the level of authority for making decisions would be to assess the risk. Items with significant risk should have decisions made in a more structured format with proper review. Decision on relatively low risks can be made lower in the organizational hierarchy without causing further delays.

Decisions should be made within the scope of control. Many decisions can be delegated to operational levels when risk is understood and there is good policies, guidelines and training on the process and procedures. There should be an authority matrix defined for the types of decisions and their risks. This matrix would identify at what level of the organization each type of decision with its associated risk will be made or authorized.

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Definition: RiskA possible event that could cause harm or loss, or make it more difficult to achieve objectives. 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 outcomes.*

Uncertainty exists in all aspects of IT service management. Risk exists everywhere and must be actively managed to ensure the in the objectives can be achieved. We would be looking at the threats to try to minimize any negative impact. We would also look at the opportunities to try to expand on any potential benefit that the organization may achieve if the positive risk comes to fruition.

In making decisions assessing the impact of risks is extremely important. If we develop plans without understanding the risks those plans generally will be ineffective when these risk items occur and were not prepared to handle them.


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Risk is part of everything we do. Risks will need to be identified and managed to ensure that the objectives of the organization can be achieved. A risk management culture will ensure that risks are continually managed and information about risks will be of available when making decisions.

The ITIL® definition of risk starts off as a negative aspect of a risk causing harm or loss. A risk is defined as an uncertain event. A negative uncertain event is referred to as a threat. A positive uncertain event is referred to as an opportunity. A holistic and balanced risk management approach will have the organization identify and manage both threats and opportunities. ITIL® original operational perspective primarily focused on the threats or the negative aspect of risk.

Do not ignore opportunities.

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Risk management needs to occur continuously. Risk management is not a singular activity or one-time. Risks need to be identified, quantified and managed ongoing. When we define a risk we’re defining the perception of the probability (because we don’t know the likelihood) and the perception of the effect (because it hasn’t yet occurred) we don’t know.

As activities progress and risks occur. Our perception of the probability will change and our perception of the impact will change as these risks occur in our organization. This will change the prioritization of the risks.

Risks will be managed according to the risk tolerance (Appetite) of the organization. Some organizations are not very tolerant of risk while other organizations are willing to take risks based on the benefits perceived.

Risk thresholds are how organizations determines that which level in the organizational hierarchy the risks will be addressed. Low operational risk can be handled by operational staff while significant risks to the organization may need to go up to the board of directors to be assessed and authorized prior to going forward.

The Service Portfolio Management practice will determine risks to products, services and projects. Risks that could impact the strategic direction of the organization may need to go up to the highest level in the organization.

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As the risk or the perception of the risk changes a reassessment of that risk will need to be performed.

The risk management program should address risks that are:Long-term = Strategic decisionsMedium-term = Managing programs and projectsShort-term = Operational in nature

Risk management is very similar to the concept of continual improvement where the risk management framework is to be embedded into everything that we do. Risks will be identified, logged, prioritized and action appropriately according to the risk tolerance of the organization. The risk management program should be ongoing and continuous. The risk management program will drive decisions being made throughout the organization at all levels.

Risks will be managed according to:

Long-term goals / risks• Long-term risks will need to be managed according to the risk tolerance

or appetite for risk of the organization• Long-term risk should cover strategic decisions. These strategic decisions

risk to the strategic decisions will be reviewed regularly or continuously not just the one time the decision is made.

Medium-term / risk• The medium-term risks are generally managed according to programs and

projects.• Portfolio management determines the risk for product and services

Short-term / risk• Operational risk management allows decisions we made at a local level

that support the overall long-term risk management approach of the organization.

Every plan should consider risks and how those risks will be managed. Within the PMI Project Management Body of Knowledge (PMBoK®) there is a entire knowledge area addressing risk management as part of project management. Plans that do not consider the risk are likely to fail and staff will not know how to handle these events when they do occur. Also an important aspect of risk management is taking advantage of opportunities. If the plan does not consider opportunities than the organization will be very limited on how well the plan will serve the needs of the organization.

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Risk management is the ongoing assessment of something that could cause harm or loss or could be an opportunity to expand the offerings or expand to new customers. Risk is basically just an uncertain event. A positive risk is referred to as an opportunity. A negative risk is referred to as a threat.

Your risk framework should take into account both opportunities and threats. For opportunities the service provider would want to be prepared to take advantage of opportunity opportunities as they present themselves. For threats, the service provider will be prepared if something negative would happen to minimize the impact to organization and its customers.

Risk spans time frames from short-term, medium-term to long-term risk assessment. In the short-term, risk management is more operational and supporting the long-term outlook and risk tolerance of the organization. The medium-term risk assessment generally deals with programs and projects that are more tactical in nature. Long-term risks are strategic in nature and are generally handled through the Service Portfolio Management practice to help manage risk to product services. The risk appetite or risk tolerance that an organization has is actually defined by the organization and influences risk decisions throughout the organization through these different time periods.

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ISO 31000

All activities of an organization involve risk. Organizations manage risk by identifying risk, analyzing risk and then evaluating whether the risk should be modified by risk treatment in order to satisfy their risk criteria. Throughout this process, they communicate and consult with stakeholders and monitor and review the risk and the controls that are modifying the risk in order to ensure that no further risk treatment is required.

Principles in ISO 31000• Create Value• Integral part of organizational processes• Part of decision making• Explicitly address uncertainty• Systematic structured and timely• Based on the best available information• Tailored• Takes human and cultural factors into account• Transparent and inclusive• Dynamic, iterative and responsive to change• Facilitates continual improvement and enhancement of the organization

Microsoft Risk Discipline

The Microsoft Operations Framework (MOF) Risk Management Discipline applies proven risk-management techniques to the challenges that operations staff members face every day. There are many models, frameworks, and processes for managing risks-all of which discuss planning for an uncertain future. However, the MOF Risk Management Discipline offers greater value than many others through its key principles, consistent terminology, structured and repeatable six-step process, and a recognition that the MOF Risk Management Discipline needs to be an integral part of the overall operations framework.

PMI

The PMI Risk Management Professional (PMI-RMP)® highlights your ability to identify and assess project risks, mitigate threats and capitalize on opportunities. In this capacity, you enhance and protect the needs of your organization.

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Risk Register

The risk register identifies the condition for each risk item, the potential effect (impact), and the information used for ranking, such as probability, impact, and exposure. The information is used to develop a risk index used for risk prioritization.

The risk register is regularly updated, or “living,” document that forms the basis for the ongoing risk management process and should be kept up-to-date throughout the cycle of risk analysis, planning, and monitoring.

Each step in the risk management process builds on the previous step by adding more elements of the risk or draws on the current elements to support decision making.

For example, the analyzing step initially adds information about a risk’s impact and probability. The process is cyclic, so future passes through the analyzing step may review and revise previous impact and probability estimates.

The risk register is the fundamental document for supporting active or proactive risk management. It enables group decision-making by providing a basis for:

• Assigning priorities.• Identifying critical actions.• Highlighting dependencies

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Risk Index

When sorted by the risk index level (high-to-low), the risk register provides a basis for assigning priorities in the planning process. During each step in the risk management process, the process owners gather information about operational risks and add that information to the master risk register.

Risk probability is a measure of the likelihood that the consequences described in the risk statement will actually occur and is expressed as a numerical value. Risk probability must be greater than zero, or the risk does not pose a threat. Likewise, the probability must be less than 100 percent, or the risk is a certainty-in other words, it is a known issue.

Risk impact is an estimate of the severity of adverse effects, the magnitude of a loss, or the potential opportunity cost should a risk be realized. Risk impact should be a direct measure of the risk consequence as defined in the risk statement. It can either be measured in financial terms or with a subjective measurement scale. If all risk impacts can be expressed in financial terms, use of financial value to quantify the magnitude of loss or opportunity cost has the advantage of being familiar to business sponsors.

The risk exposure and risk tolerance of the organization will be used to develop the risk response for each level of risk.

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Definition: GovernanceThe means by which an organization is directed and controlled.*

Every organization has a governing body or group of people who are accountable at the highest level for the performance of the organization.

EvaluateUnderstand the current situation and the needs of the organization.

DirectProviding the management system communicate the requirements and guidelines and policies down to the organization.

MonitorUnderstand the current status and how successful the organizations moving towards his goals and direction.


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Governance decisions are made at the highest levels of the organization. Not all decisions to be made at the same level. If all decisions were at the same level this would cause a bottleneck.

Decision-making authority should be delegated as far as possible while still ensuring that required outcomes are consistently produced. This will help ensure people are respected, motivated and valued.

Everyone should understand the scope of control and make decisions within that scope of control. For staff members, if the scope is too narrow, decisions will be continually pushed up to a higher level of hierarchy for the decision to be made. If the scope is to broad then additional risks might be created due to the lack of boundaries and control.

Decision-making authority should match the level of risk associated with the decision-making authority.

Governance is critical to all planning activities in the Service Value Chain. Every plan must support the direction from governance. This will ensure that the plans are supporting and aligned with the strategic objectives of the organization. Governance will also ensure that the compliance to any of the requirements are addressed during planning.

Directions and governance are critical to all improvement initiatives. Many improvement initiatives deal with compliance to policy and process. Every aspect of the improvement should consider governance and contribute to the overall organizational objectives.

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All decisions within an organization must be aligned to the overall organization mission and strategy.

Governance structure and role in governance:• Board of Directors• Shareholders• Audit committee

Plans are established to support the strategic objectives of the organization. Many of these plans ensure compliance with governance decisions. These governance decisions are inputs into the planning activity of the Service Value Chain. The organizations will need to communicate their governance decisions and ensure that they are overseen and applied carefully and fairly.

Internal IT organizations doesn’t generally govern itself. Governance is part of the overall organizational responsibility. IT governance is responsibility of the Board of Directors of an organization. The governing body is part of the parent organization in the IT department will have a group or person or group such as a steering committee that then oversees certain decisions that are delegated to that person or group.

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Controls are needed to support governance:• Risk management• Financial controls• Operational controls• Compliance controls - external regulatory

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Controls need to be sufficient but not excessive.

If the controls are perceived as being excessive or don’t meet the purpose they were designed for, the controls will be bypassed and it would be as if that control were not in place at all. If staff perceive the controls as being overly bureaucratic and having no value, the staff will tend to bypass that control. If the control does not meet the organizational purpose and still remains in place, the control won’t add any value.

When designing controls you need to understand the people and their behavior that these controls may influence. Controls that are easier to follow will be more effective that than controls that are hard to follow. Controls are hard to follow will tend to be circumvented by staff that have many things that they’re working on.

People are extremely creative and can find methods to work around the controls that they don’t like or if the controls that are not effective.

Mandatory fields that are perceived as being of low value in completing are often filled with just simple text. An example mandatory field on an incident logging form might require text in the field. Many staff that want to bypass this will just insert a single ”*” and move on. The workflow system saw that there is text in the field and accepted the activity. In effect the service provider staff filling out the incident form bypass the control of needing text in that field.

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People generally follow the rules that they understand and perceive the rules as adding value to the organization. Mandatory fields need to be explained how the information will be used so that the staff will see the value in filling out not just having a workflow system that requires some text in a field.

In dealing with controls some rules can include:• Avoid excessive measurements• Focus on value focus on the most important measurements

When organizations implement controls, they aim to ensure that each control produces the desired result without creating unintended or undesirable consequences. Whenever controls are established the controls need to be sufficient but not excessive. The controls should support the organizational purpose for which the control exists. If the control is bypassed it might as well not exist.

Controls that are perceived as being bureaucratic or getting in the way of staff achieving their objectives will be bypassed if possible. If the controls are perceived to have no value, the people performing the activities may not realize that the rationale for the control resulting in the control being bypassed.

If controls are excessive, the control will be circumvented. Controls should be easily followed. Control should be automated or built directly into the technology that people are using. One example could be password character length. The technology could have the ability of a control or reject new passwords that do not meet the character length requirements.

Measurement and reporting are part of a common control environment. Excessive measurements may not be practical to sort through all of the information that can be acquired. The measurements should be limited to the information that will help make informed decisions. Measurements required for compliance are mandatory.

You will receive the behavior you incentivize. People will make their required numbers even if it is detrimental to the overall organizational objectives. Be careful what you ask for you just may receive it.

Example: Service Desk call durationReducing service desk call (duration) time may increase customer dissatisfaction because the service desk is not handling the call effectively. They are being efficient but not effective.

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Continual improvement needs to be embedded in the organizational culture. This does not happen by itself it has to be promoted by leaders within the organization. Besides having the Continual Improvement register in place a process for managing improvements need to be in place.

In order to embed continual improvement to the organization key people and leaders in the organization must drive continual improvement. Unfortunately improvement may lag or fail if these people driving improvements change roles in the organization or leave the organization.

Innovative organizations will embed the culture of continual improvement into their organization. Management commitment is important to drive continual improvement. Management commitment refers to management being involved in the ongoing activities and provide funding and support for the staff driving continual improvement.

Consider using Organizational Change Management to establish a culture of continual improvement.

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Not being satisfied with the status quo, the service provider should encourage the behavior of continual learning amongst the service provider organization. Not knowing the root cause of issues with the organization can lead to difficulties even though someone in the organization may have the right or correct information.

Practitioners should be committed to continual learning and improving their existing level of knowledge. Data-driven experiments can improve hypothesis and lead to better solutions. Feedback is an important aspect for continual learning.



Continual Improvement is a recurring organizational activity performed at all levels to ensure that organization’s performance continually meets stakeholders’ expectations.*

Everything in an organization can be improved. The scope of the Continual Improvement is the entire IT service management as a program. This could include the entire Service Value System. All aspects or dimensions relating to an organization can be improved. Improvements can be applied to the Four Dimensions of Service Management:

• Organizations and People • Information & Technology • Partners & Suppliers • Value Streams & Processes

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The customer environment is constantly shifting. The purpose of Continual Improvement is to align the service offerings to the ever-changing business environment and customer needs. The service provider should focus on the need for continual improvement in all areas of the organization.

Organizations are constantly improving. Improvement relies on comparing and measuring the current state to the future state. Improvements drive changes. These changes to the current state should lead to enhanced outcomes for one or more of the stakeholders.

One important concept about improvement is that everything can be improved but the improvement should add value. Just because we can improve something doesn’t mean that we should improve if there is not sufficient value at the time.

Everyone in the organization is responsible for improvement. Everyone can identify opportunities for improvement and make recommendations on how these improvement initiatives can be implemented.

Improvement requires some level of change. Larger improvements may require Organizational Change Management (OCM) to be involved for the people side of the change. Change Enablement will be involved for the products and services aspect of the change.

From the guiding principle of Start Where You Are, we understand that it is rare to start from scratch or nothing. The guiding principle of Start Where You Are requires an objective assessment of the organization’s current state prior to performing any activities to achieve a desired or future state. Generally improvements are performed after assessing the current capabilities and then identifying ways to perform at a higher level.

Measurement provides a means of objectively quantifying information. This information is generally used for making decisions. Measurement is the starting point for improvement activities throughout the organization. The role measurement also provides information to allow predictions of performance to occur. This measurement can influence planning. Measurement is the beginning of good decision-making not the end.

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The Continual Improvement Model represents a structured approach for improvement and alignment with customer expectations. Service providers who deliver upon customer expectations will be successful. Those who disappoint customers will fail. It does not matter how well something is done, or even how cost-effective, if the delivered product doesn’t meet the customer’s need or expectation.

Continual Improvement is a recurring organizational activity performed at all levels to ensure that organization’s performance continually meets stakeholders’ expectations.*


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The Continual Improvement Model provides a mechanism for re-evaluating the service provider’s performance in relation to the needs and expectations of the customer. This activity should be performed consistently and by parties tasked with ensuring the improvement of an organization.

Note: Continual Improvement should be embedded in all Service Value Chain activities.

“What is the Vision?” Embrace the vision of the customer by understanding the high-level business objectives. A proper understanding of the vision will align the business and IT strategies.

By embracing the vision and mission of the organization the improvement opportunity needs to support the organization’s goals and objectives. The first step in the Continual Improvement Model is to understand the vision of the organization and define the vision of the improvement initiative. By defining the vision, this sets the context and provides guidance for decisions to be made regarding the improvement initiative. A high-level vision statement will be documented for the planned improvements that will be aligned in support or underpin the overall corporate vision, mission, goals and objectives.

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Having a defined vision statement for the continual improvement initiative will ensure that a high-level direction has been understood by those involved in the improvement initiative. The stakeholders involved in the improvement initiative will understand the expected value to be realized from the improvement in the stakeholders will understand their roles in helping to achieve the expected value.

During the step of understanding the vision, the continual improvement initiative will need to understand the organizational objectives and align the improvement initiative with those organizational objectives.

The continual improvement initiative will create a vision for the improvement for the specific improvement initiative. This vision is aligned with the organizational vision shared vision of the organization. Once the vision is been established for the improvement initiative it will need to be continually assessed to ensure alignment is maintained with the organizational vision.

By defining the vision for the improvement, the staff working on the improvement will have a shared vision and an understanding of their role how their role supports the improvement initiative and healthy improvement initiative supports the organizational vision and mission. Each of the staff has its own scope of control that needs to be aligned with the vision of the improvement initiative and the vision of the organization overall.

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Step 2. Where are we now?

The service provider will assess the current situation to obtain an accurate, unbiased snapshot of where the organization is currently. This baseline assessment will represent the organization’s current position in terms of the business, organization, people, processes, and technology.

The service provider will assess the current situation to obtain an accurate, unbiased snapshot of where the organization is right now. This baseline assessment will represent the organization’s current position in terms of the business, organization, people, processes, and technology.

During the assessments, the performance of the process will be compared to industry standard norms as a mechanism to compare the service provider to the rest of the industry sector. This comparison to industry norms can identify gaps in process performance, monitoring and reporting.

A very common assessment mechanism is to compare the service provider to a maturity model or framework that has been adopted by the service provider’s industry. The maturity assessment evaluates all aspects of the process environment including people, process, and technology. Other factors within individual maturity frameworks can include strategy and vision, along with culture of the service provider’s organization.

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The current state should be assessed through objective measurement when ever possible. One way to ensure this is that people should not assess their own work or work that they are responsible for. The assessment of the current state should be performed by people that are not part of the process or service being assessed.

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Step 3. Where do we want to be?

Understand and agree on the priorities for improvement. This agreement will define the expected improvement for both the short-term and long-term. Measurable targets for the improvement will be defined. The agreed deliverables can then be measured at the end of a specific time-frame.

Once we identify Where we are Now, we can then move to the next step of the CI Model which is Where We Want to Be, based on where we are now.

Based on the results of the current state assessment, service provider can identify the gaps between the current state and the end desired state established in the vision.

The service provider will understand and agree on the priorities for improvement. This agreement will define the expected improvement both short-term and long-term. The agreed deliverables can then be measured at the end of a specific timeframe.

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With a gap analysis the service provider will to see to basically fill the gap between the current state and the desired future state. In order to ensure this is done in line with objectives the service provider will define critical success factors and key performance indicators.

When identifying metrics for the improvement initiative, service provider can use the SMART principle. SMART is an acronym for the following:

• Specific• Measurable• Achievable• Relevant• Time bound

The output of step 3: Where do we want to be? can include:• A description of the desired future state• The results of a Gap analysis• A prioritized list of improvements• A business case for improvements

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Step 4. How do we get there?: The service provider will detail a specific plan of improvement of achieving alignment with the business objectives. This alignment can only be brought about by the delivery of high quality services that meet the customer’s needs. Control of service delivery can only be achieved through some form of implementation ITSM processes.

The service provider will detail a specific plan of improvement for achieving alignment with the business objectives. This alignment can only be brought about by the delivery of high quality services that meet the customer’s needs. Control of service delivery can only be achieved through some form of implementation of ITSM processes.

The service provider can now establish a formal project for the improvement initiative. Project management may be used to carry out the work in a series of iterations. These iterations can move the improvement towards the overall objective.

The action plan for improvements should utilize the results of the assessment, business case and expected outcomes as key inputs to a continual improvement plan.

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Continual improvement activities of the service providers should organize work into smaller, more manageable units. Project management frameworks refer to this as creating a work breakdown structure (WBS). The service provider should define the major deliverables of the improvement method and break the activities into smaller manageable work packages. This can allow for:

• Sequential or simultaneous activities • More manageable activities• Ongoing tangible results• Work completed in a timely manner• Iterations can be built on to create future improvements

Step 5 Take Action

The Take Action step is a simple concept. Plan your work your plan. By defining a formal project management methodology and a project can be established for the improvement initiative. Service provider will take action and execute the activities defined in the project plan. The project will use the metrics defined in step three, “Where we want to be?” to ensure the project is on track and achieving its objectives.

Large improvement initiatives will use formal project management methodologies to ensure completion and a efficient and orderly fashion. Other smaller initiatives may be just assigned to individuals to perform individual activities.

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Step 6. Did we get there?: Verify the measurements and metrics are in place to ensure that milestones were achieved, processes compliance is high, and business objectives and priorities were met by the level of service. This measurement will verify meeting the targets identified in step 3.

Verify that measurements and metrics are in place to ensure that milestones were achieved, processes compliance is high, and business objectives and priorities were met by the level of service. This measurement will verify meeting the high level targets identified in step 3.

The progress of the improvement initiative will need to be tracked against the metrics defined in the planning of the initiative. The service provider will verify that the desired results have been achieved. If the desired results of the improvement initiative have not been achieved there may be additional work or rework that needs to be undertaken.

Evaluating that value realization has met the targets can demonstrate that the services have created the target value and supported the customer experience. Another part in evaluating value realization is understanding that the original purpose and value proposition are still appropriate and valid.

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Continual Improvement Review

Definition: Improvement ReviewAn evaluation using metrics and other evidence to determine if an improvement has achieved its desired outcome and, if not, what needs to be done to complete the work.*

The results of each improvement iteration will need to be reviewed to ensure the objectives and desired outcomes have been achieved. KPIs and critical success factors established in step 3 of the continual improvement model will be validated that they have been satisfied buy the improvement effort. Where the objectives and outcomes have not been achieved, there should be additional iteritations through the CI model to achieve value.

Step 7. How do we keep the momentum going?

The final step should ensure that the momentum for quality improvement is maintained by assuring that changes become embedded in the organization.

The final step should ensure that the momentum for quality improvement is maintained by assuring that changes become embedded in the organization. The improvements should be institutionalized or embedded into the organization to ensure that stakeholders understand the improvements and that the new or modified behaviors are not at risk of reverting back to their old methods.

Successful improvement initiatives should be institutionalized into the standard operating procedures of the organization. Full lessons learned should be reviewed to identify any further opportunities for improvement that have been identified through the progression of the improvement initiative.

Definition: Lessons LearnedThe evaluation of an improvement initiative or iteration of the purpose of understanding what did or did not go well and what should be done differently in the future in similar circumstances.*

Continual improvement requires extensive measurement and reporting to be utilized throughout the CI model. Each step of the CI model will rely on information from these measurement and reporting to validate each of the steps and to ensure the improvement initiative is on track to achieve its objectives.


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The Continual Improvement practice identifies as and manages improvements of products, services and service components across the Service Value System. Continual improvement is embedded within and is a component of the Service Value System indicating that everything within the organization can be improved. Just because something can be improved is not mean that it should be improved. Improvements should deliver value to the stakeholders. If they improvement cost more to implement than the value received then it’s not prudent to select that improvement opportunity. Improvement opportunities will need to be prioritized by benefit to the business. The benefit can be in financial or non-financial terms. The prioritization determination techniques should be established by the organizational governance.

Prioritization recognizes that all improvements can add value just that some improvements offer greater value than others. The service provider will need to identify which of the improvement initiatives should be of implemented first. The improvement initiative that offers the greatest value may also cost the most money and may not of been budgeted for this accounting cycle. The service provider could select different criteria for prioritization such as which of the items improvement initiatives will provide the greatest value within this budget range. The Continual Improvement register will be used to help log and prioritize these improvement initiatives. The Continual Improvement model will be used to manage these improvement opportunities that have been prioritized and selected by the organization to act on.

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Assessments are used to measure, analyze, the behavior and / or performance of a practice, process or value stream. The assessment should reflecting the current state and can be used as a baseline to document the future or desired state. The assessment,should consider all four dimensions of service management. Assessments can involve taking measurements, processing them into metrics, and comparing these with the desired or future state of the environment. Assessment baselines should be retained and used as points of comparison against future assessments.

Assessments can be performed as an ad-hoc single one-time initiative to help identify opportunities for improvement. Another perhaps better way these assessments is through a regular program of continual review that will track prior recommendations and improvement initiatives to ensure that there is progress being made towards the objectives. The objectives of the assessment should be well defined and documented prior to the assessment proceeded. The objectives of the assessment should also be in line with the organizational needs and objectives.

The assessment objective can include:• To understand how well something is performing• To establish a baseline for measuring future improvements• To validate that an improvement initiative has met its objective• To compare the organization with a competitor• To understand the differences between performance and a standard

framework

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There are many assessment methods available. It is important service provider choose the assessment methodology to support the objective they are trying to achieve. The assessment will help get a better understanding of the current state of the organization. The assessment method chosen should support stakeholders in understanding that the conclusions are valid and due diligence will perform prior to developing the conclusions.

Gap analysisIdentification of the differences (Gap) between actual practice and the chosen assessment criteria

SWOT analysisIdentification of the Strengths, Weaknesses, Opportunities and Threats

Change readiness assessmentAn estimation of the organization’s ability to transition to a new way of working

Customer / user satisfaction analysisAn analysis of how customers and/or users feel about the services that they consume utilizing the feedback from these customers and users.

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SLA achievement analysisAnalysis of the quality of a service or services based on a comparison of service performance against service level agreement (SLA) targets

BenchmarkingA comparison of the results of this assessment with results of similar assessments performed or other comparable organizations

Maturity assessmentA comparison of the maturity of the process or an organization based on a defined framework, such as the ITIL® process maturity model

The objective of the assessment will help determine the type of assessment method that is appropriate to achieve the objectives. The objective should be defined and also not be too broad or too narrow in scope to provide valid. The assessment objectives should align with the high-level vision for the improvement initiatives under consideration.

Key questions for determining the objective can include:• What are the assessments objectives?• What is needed to perform the assessment?• What criteria will be used for the assessment?• What outputs are expected from the assessment?

CollectionMethod

Metrics/data mining

Surveys

Interviews

Round tables

Observation

Output

Metrics derived from existing standard reports or from mining existing data sources

Feedback in response to a set of written questions

Feedback in response to a set of verbal questions

Feedback gathered from interactive group meetings

Reports from direct inspection and measurement of behaviors and performance

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A gap analysis is a common assessment type that compares the current state with some defined future state. The output of the analysis is basically the gap between the current and future orders art state. This can also include plans for how the organization can move from the current state to the desired or target future state.

The gap analysis will consider the following:• Where the organization currently is?• Where the organization wants to be?• Where are competitors or other targets?• Where do the customers want the organization to be?

The gap analysis and its output is not static. As the target state should be adjusted on a regular basis to reflect the ever-changing goals in business environment of the organization. The gap analysis should then be a continual assessment of the organization as opposed to a single one-off or ad hoc exercise.

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Pros for a gap analysis• Can document customer experiences and expectations• The output of the gap analysis can be use to prioritize improvements• The gap analysis can measure productivity• The analysis can highlight missing information and documents

Cons for gap analysis• The gap analysis may need a special skill set that is not available in the

organization and her could incur significant costs in performing this an analysis or assessment.

• The results of a gap analysis can be subjective

The SWOT analysis can identify Strengths, Weaknesses, Opportunities and Threats, often outlined in a Boston box format

Strengths and weaknesses are internalOpportunities and threats are external

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The information from the SWOT analysis will be used to enhance and utilize the organizational strengths and minimize the impact of its weaknesses. The organization can then use information from the SWOT to exploit pending opportunities while mitigating threats that have been identified.

Usage of SWOT can lead to:• Mitigate threats• Exploit opportunities• Harness strengths• Minimize the impact of weaknesses

Pros of SWOT analysis• Can be swift to deliver this information• Generally of a strategic nature directly supporting objectives• Can be compartmentalized

Cons of SWOT analysis• Identifying the right participants may be challenging• Items are generally not prioritized• Results are subjective

A change readiness assessment will gauge how well an organization is prepared to transition to a new way of working. This is often performed as part of the organizational change management practice. This can assess the impact of the ability of the organization or portion of the organization to adapt to changes in process or technology. The change readiness assessment can also highlight areas that may be a risk preventing the organization from achieving its desired state as a result of a change in the environment.

A culture of continual improvement is highly dependent on the organization’s ability to absorb a large volume of changes. All continual improvement initiatives require some level of change or improvement. One of the objectives of the organizational change management practice is to minimize the resistance of throughout the organization that could impact the success of change initiatives. The change readiness assessment will also identify potential change agents that may be able to help facilitate the change in the organization.

Definition: Change AgentA role that facilitates the development, application, and avocation of new ways of working.*


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Customer/user satisfaction analysis is generally getting feedback often in the form of a survey from customers and users on how well they are satisfied with improvement initiatives that been completed within the organization. One of the major objectives is to understand whether the satisfaction levels are in line with the projected or expected performance of the improvement initiative.

The length of the survey is important to get people to complete survey. If the survey is too long many customers and users will skip the survey and the service provider will lose the opportunity to identify opportunities for improvement. Many surveys are short with 5 questions or less. One incident call I made reticently was completed very satisfactory had a very simple “How would rate my reply?” The response choices are: Great (green) Okay (black) Not Good (red).

Benchmarks compare the performance of the organization against those of similar organizations. The scope could be practices, products or services. Benchmarks can be done a regular basis as an input into the continual improvement practice. Benchmarks can also be drivers and help motivate cultural change and justify reasons for improvements and changes. These benchmarks can become justifications and communication tools for the staff to understand the reason to improve to stay in line or to surpass the competition.

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Analysis of service quality based on comparing service performance to targets defined within the service level agreement. This is generally part of a service review meeting between the service provider and the customer using measurement and reporting of performance against targets. Service targets are targets that we have agreed to. When the service provider must act right away if the service targets are not being achieved. When the service levels level targets that are not met, continual improvement should be initiated immediately.

Metrics alone are not enough to understand the performance of the service. The service provider needs to communicate with the customers part of the service review meeting. The SLA analysis and service review meetings need to occur on an ongoing basis and not a one-time or ad hoc event.

Definition: Service Level Agreement (SLA)A documented agreement between a service provider and a customer that identifies both the services required and the expected level of service.*


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A maturity assessment will compare the capability of a process compared to a maturity framework or model. Capability Maturity Model Integrated (CMMI) is a common framework for assessing maturity. Other frameworks have maturity models such as ISO 15504, COBIT and ITIL.

Maturity assessments evaluate how well an organization can do something generally focusing on process performance towards a defined maturity frameworks. Reference maturity frameworks can be used at multiple levels within the organization.

The maturity assessment result should not be the ultimate goal of the maturity assessment. The maturity assessment helps identify how own organization is following defined practices in a maturity framework. The results of the framework should be utilized to drive improvements.

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A business case can vary in content and structure between different organizations. It is preferable that within an organization that the structure of the business case remain consistent throughout the organization. The business case will clearly identify the proposal and the benefits associated with the decision the business case is focusing on. An item of importance in the business case is understanding of the risks and contingencies that may influence the perception of value in the business case.

Structure of the business case includes:• Introduction or executive overview• Methods and assumptions• Business impacts or outcomes• Risks and contingencies• Recommendations

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The financial analysis is a core component of the business case. Often referred to as the cost / benefit analysis. There are other components of value to the organization beyond purely financial aspects of value. The business case should demonstrate that the product or service will add value to the organization and the organizations stakeholders in order to be approved. The business case should contain realistic goals and expectations. Factors to consider include:

• Rate of change• Culture• Resource availability• Budget restrictions

Any of these items could impact the ability to successfully implement improvement initiatives regardless of the documented and perceived value of those improvement initiatives.

The organizational structure and hierarchy will determine the audience of each business case. The business case should be aimed at the appropriate level of authority that can us properly assess both the benefit costs and risks associated with these improvement opportunities. The business case should highlight the benefits to the organization and support the organizational strategy or be rejected. If the business case cannot be tied back to value and supporting an organizational objective it should be rejected.

The business case will be reviewed prior to the acceptance or the authorization of the improvement initiative. Different stakeholders will have different priorities and different viewpoints on the business case itself. Many organizations will formally present the business case after it has been reviewed by primary stakeholders. In the formal presentation this is where the business case will be formally accepted or rejected.

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The improvement review will check the and confirm progress and the value expected that it was actually delivered as part of the improvement initiative. Generally each iteration of improvement initiative should improvement review to validate the goals and objectives of that iteration have been met and are delivering value as expected.

Step three of the CI Model will define high level success factors and KPIs that will be used to evaluate the performance of the improvement initiative. These KPIs will be reviewed in step six did we get there.

Another term for the improvement review might be a “benefits realization review”.

Definition: Improvement ReviewAn evaluation using metrics and other evidence to determine whether an improvement has achieved its desired outcomes and, if not, what needs to be done to complete the work.*


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Definition: Lessons Learned AnalysisAn evaluation of an improvement initiative or iteration for the purpose of understanding what did or did not go well and what should be done differently in similar future circumstances.*

The goal of the lessons learned analysis to determine what went well and what did not go well. This can lead to identifying how to do things better for future improvement initiatives

Organizations should be continually learning as they progress through their improvement initiatives. Formal lessons learned should add knowledge to the organization to be used in future assessment of improvement initiatives. If the expected results were not achieved or differ different from what was planned the initiative should be marked as failed and require a thorough analysis to document the lessons learned.

The lessons learned should be documented, centralized and available to those participating in improvement initiatives. These lessons will be reviewed and reported on and should be used by future improvement initiatives. From a Safety Culture perspective is important to ensure that people are able to voice their concerns without fear of retribution.


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It is important to create a culture of continual improvement and to embed this culture of continual improvement throughout the organization. The cultural continual improvement encourages stakeholders to identify and suggest improvement opportunities to be assessed and that the stakeholders will be encouraged to voice their concerns and identify risks associated with these improvement opportunities also. The continual improvement practice success relies heavily on senior management’s commitment to developing a culture of continual improvement across the organization.

Continual Improvement is part of the Service Value System. The scope of continual improvement is covering the entire Service Value System and the Four Dimensions of Service Management.

Everyone in the organization is responsible for Continual Improvement. Improvements can be implemented at any level of the organization. Staff within the organization should understand the objectives to be met from improvement initiatives. These objectives should be cascaded down from the enterprise to the business unit to the department to the individual.

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The Continual Improvement model Is a high-level guide for how to manage improvements. Continual Improvement model is at the core of ITIL® improvements. Having a method or technique like the Continual Improvement model allows the improvement initiative to have a higher likelihood to be successful.

The Continual Improvement model is not a rigid structure that has to be followed in a dramatic waterfall approach. As you are progressing through the stages of the Continual Improvement model there are activities are going to be iterative and will be some back and forth between the different stages as you go through improvement initiatives.

The change agent can be thought of as a champion for a specific improvement initiative in the organization. Each of the improvement initiatives drives change and is owned by a specific change agent as the champion.

Definition: Change AgentA role that facilitates the development, application, and avocation of new ways of working.*


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Direct, Plan and Improve affects changes to the organization and these changes will need to be accepted by the organization and Organizational Change Management (OCM) will play a role in the people side of accepting these changes as part of Direct, Plan and Improve activities.

Direct• Directing staff affects their behavior. You are looking for changes in

behavior, changes in activity or changes in the way that the work is performed.

Plan • When planning changes to services or new services these plans need to

consider the people aspects of the change. One of the four dimensions of service management is Organizations and People

• Anytime that we are planning we may also be changing the work or the way that people work and this will require OCM to be involved.

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Improve• Improvement initiatives cannot be successful without Organizational

Change Management• As part of the planning of the improvement, the service provider will need

to understand the involvement of each of the different stakeholders and how the improvement would impact them.

• The guiding principle of Collaborate and Provide Visibility will go long way into helping each of the stakeholder groups to accept and understand these critical decisions.

Change Enablement deals with the change of hardware, software and configuration items. Organizational Change Management deals with the people (human) side of changes in the organization. Every change involves people and the improvements require people to change either the work they do or their behavior. Sometimes the roles of staff are changed as part of an improvement initiative. OCM strives to influence users and staff to understand the benefits and accept the change.

Every change involves people and the way people perform their work. Even changes to technology may change the way people do their job or changes may be a result of organizational restructuring. OCM strives to convince people of the value of the change in order to reduce the resistance and thus ensure the success of the change

Purpose of OCM*

• Win the hearts and minds of everyone involved in a change• Reduce or remove resistance to change• Ensure changes are implemented and sustained successfully• Transition people, teams, and organizations to the desired future state

Benefits of OCM*

• Helps implement improvements smoothly• Helps people understand the purpose of the change and how they will be

affected• Helps people believe that the improvement will actually deliver value


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Organizational Change Management (OCM) is primarily focused on the human side of changes. This supports changes being made to ensure the changes are implemented smoothly and successfully in providing long-term benefits. It’s very difficult to get people to change the way they do things. People need to understand the importance and the benefit of the change to buy-in to the change to ensure that it is more likely to succeed.

Organizational Change Management will demonstrate to people the value of change thus to help reduce the resistance to those changes and ensure that the benefit of those changes can be sustained. As we are dealing with people and their perceptions, Organizational Change Management requires a special skill set. If Organizational Change Management is outsourced items to be considered include:

• You can outsource an responsibility for an activity• You cannot outsource accountability

There are five elements involved for successful change initiatives:1. Clear and relevant objectives2. Strong and committed leadership3. Willing and prepared dispense4. Demonstration of value5. Sustained improvement

Organizational Change Management should be a part of the planning of any major change to an organization. Organizational Change Management can also be used at different levels in the organization down to the operational level to consider the human factor for any change. Organizational Change Management is mandatory for major changes in an organization and should be part of the planning for any major change in the organization.

Many improvement initiatives fail due to staff not institutionalizing the improvements into their standard operating procedures. For improvements be successful Organizational Change Management will need to ensure that the people are involved an understanding the rationale and benefits of the change. Organizational Change Management will ensure that the people impacted by changes have been considered and will accept and adopt those changes. If staff do not accept the changes, Organizational Change Management’s role is to educate stakeholders on the benefits of changes to get stakeholders to accept the changes into their standard operational procedures.

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There will always be resistance to change. People do not like change. A major objective of the OCM practice is managing the resistance to change. Most people resist change because they prefer what is known to what is unknown. If people don’t understand the change they will resist the change.

Changes and improvement initiatives should be as transparent as possible. Identifying stakeholders as part of a communication plan will be an important aspect in getting people to buy-in to the value of the change.

Tactics that are available to help manage resistance to change can include the following:

• Deliver targeted communication that addresses stakeholders concerns• Provide FAQ responses• Provide education and training to raise awareness• Involve employees in the improvement initiative• Be transparent• Use storytelling: People engage with stories and this is supported by the

emotional aspects. Talk about a specific customer that has moved to a competitor because of something that was not being done. People will understand this better than just numerical facts

• Prioritize improvements to combat change fatigue• Provide sponsors and managers with messaging tools• Leverage quick wins• Create a sense of urgency and stakeholders

Understand Kotter’s eight steps. ITIL® 4 does not recognize or identify Kotter specifically but this could be helpful.

You can outsource an activity. You can outsource the responsibility for performing activities related to OCM. Accountability cannot be outsourced for OCM. There must be resources within your organization to carry out OCM. This could be in HR, business change departments.

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Definition: StakeholderA stakeholder is a person or organization that has an interest or involvement in an organization, product, service, practice or other entity.*

Stakeholders are generally anyone who has a vested interest in a product or service. Stakeholders include staff, suppliers, managers, users, customers and sponsors. Stakeholders can be internal or external to the organization.

Stakeholders can include:• Service provider• Consumers Customers Users Sponsors• External stakeholders Community Regulators


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Stakeholders need to be identified so that the service provider can manage the needs and expectations of the different stakeholders. Different stakeholders will have different needs. It is important for the service provider to understand each of the different stakeholder groups and their motivations. The service provider will need to create a communication plan for each of the stakeholder groups. As part of creating a communications plan, there are some questions that need to be answered:

• Who are the stakeholders?• What interest do they have in these product or service?• What is their motivation?• What information do they need?• How do they want the information communicated?• With their current feelings or opinion on the product or service?

In order to mitigate stakeholders concerns, the service provider also need to understand the stakeholder’s position on the change or improvement initiative and the stakeholder’s preferred communication mechanism.

The first steps is to create a stakeholder analysis that will identify each stakeholder and their interest in the product or service. The stakeholder analysis worksheet will allow the service provider to start identifying the stakeholders and what is important to each of those stakeholders. After that the service provider can start to create a communication plan based on the stakeholder analysis.

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One of the tools used for identifying and categorizing stakeholders is stakeholder mapping. In stakeholder mapping we want to understand the power and influence of each of the stakeholders. This will help us understand which stakeholders are the most important to win over to become supporters of any new or improved product or service.

The stakeholder map helps the service provider understand the power and influence of each stakeholder and how changes may affect or influence stakeholders and their acceptance of the change or improvement initiative.

The stakeholder map will help identify individuals that could be influential in the organization and could help the change to be successful. We should understand how likely they are to respond to the improvement, either positive or negative. One goal of managing stakeholders is to understand the stakeholders so we can win their support for the improvement initiative by showing the benefits and the value of the change or improvement initiative.

Powerful stakeholders can shape initiatives at a very early stage. Gaining support from powerful stakeholders can help in providing more resources to initiatives that have the support of those stakeholders. Communication with stakeholders should be frequent to promote the benefits of the initiative. This falls under Organizational Change Management. Stakeholder perceptions should be understood and any responses to initiatives should have been anticipated and responses to the stakeholder’s responses should be planned in advance.

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Stakeholder mapping will allow the service provider to categorize stakeholders by their power and influence on one axis and impact and interest on another axis. This will allow us to categorize stakeholders to determine the level of stakeholder management and communication that needs to be applied for the appropriate stakeholder classification.

Stakeholder categories are:

• Critical:

• Major:

• Significant:

• Minor:

Must be fully engaged

Must be satisfied

Should be kept informed

Need monitoring and informing

These categories are based on their power or influence on the organization and also their interest and involvement as another axis.

High power and involvement / High impact:

High power / High interest:

Low-power / High interest:

Low-power / Low-impact:

Must be kept fully engagedCritical stakeholdersMay require one-to-one communication

Must be satisfied Have sufficient communication to keep them satisfied

Involvement: should be kept engaged

Monitor and keep informed

Note: this can become a very political concept and should be used carefully.


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Personas

Groups of stakeholders can be represented with personas to help manage targeted communications relating to a collective as opposed to an individual. The persona should represent generally the collective or a portion of a collective but described as an individual.

An example of a persona we might name as Antonia. We would then describe Antonia’s typical day and interaction to help us understand what is important to Antonia. The persona of Antonia will then help us identify the communication that is important for Antonia and anyone like Antonia.

Good communications is fundamental for the success of any change initiative. The service provider will need to know how the organization and staff will perceive the change initiative. Communications as part of organizational change management is a fundamental component of good service management practices.

• Communication is a two-way process• We are all communicating all the time• Timing and frequency matters• There is no single method of communication that works for everyone• The message is in the medium

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Communicationisatwowayprocess

Good communications requires that the message has been acknowledged and understood. The sender of the message has a responsibility to ensure that it has been received and understood while the receiver of the communication has responsibility to confirm that they understand the message that has been sent.

The service provider needs to ensure that the messages are understood by having sufficient feedback between the service provider and the stakeholders for which the communication has been devised. Emails are a one-way form of communication.

The service provider can use listening and observation to understand whether the stakeholders have received and understood the communication. People are more likely to engage in the improvement initiative if there is good two-way communication and that the people feel that their feedback is being heard and acted on.

Communication should be a two-way process. Broadcasting is a one-way form of communication that is not effective in Organizational Change Management. Broadcasting is a mechanism that might share information but is not going to sway stakeholders or even encourage feedback from the stakeholders which is very important.

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WeareCommunicatingallthetime

Even without speaking or sending a written message we may still be communicating. Body language, gestures and tone of voice are also a form of communication. Yawning during a meeting is a form of communication. Nonverbal communication or is an important aspect of communications. Your style of communication affects other people emotionally and this may impact their perception of the improvement initiative.

We are communicating all the time through body language and tone of voice. Much of a personal communication is delivered nonverbally. Communication is influenced by the person’s emotional state and the tone to which the communication is delivered.

Listening and empathy skills are important in communications. Operational teams should empathize with customers and users when supporting products and services delivered by the service provider. The communication style may have an impact on how the communication is perceived by colleagues and other stakeholders.

An act of omission such as leaving someone out public communication trail can be perceived as part of the communication. Think about spelling and grammar errors.

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TimingandFrequencyMatters

Good timing is essential for good communications. Communication must be proportionate, relevant and appropriate for the time. There can be instances where the project over communicates by sending out too much information at the wrong time. A good communication plan will take into account the timing and frequency of communication. Don’t over communicate! Regular communication reduces the need for sporadic or ad hoc communications.

Good communication requires common sense, tact and diplomacy. The service provider should develop relationships with the consumers and stakeholders by providing open communications which informs each of the stakeholder groups what the other is thinking and doing. Stakeholders are more likely to support major changes if they understand the perspectives and the priorities and that these priorities are aligned with overall organizational priorities and objectives.

Communication early is important. Good timing for communication is essential to get things done. The frequency of communication matters. If the communication is long and drawn out and very frequent it will tend to be considered background noise and ignored. But also we have to communicate frequent enough that people remember the issue that we are communicating about. So there is a balance between over communicating and under communicating from a frequency perspective.

The service provider will need to understand the business level of activity and think about the types of communication during high activity and priority activities of the business. Don’t bring up a minor issue in the middle of a major incident.

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Thereisnosinglebestcommunicationmethod

There is no single method of communication that works for everyone. Each stakeholder and stakeholder group has different preferences for receiving and sending communications. As part of the identifying and managing stakeholders we need to understand who we are communicating to and what is important to them. The service provider should understand all options for communications and which options are relevant to each of the different stakeholder groups.

Each stakeholder has different preference for how messages are sent and received. There are several techniques that can be used to ensure that the audience has been reached. Communication can be as simple as publishing status on a website or as or involved as having a promotional event to discuss the status and launch of a new product or service. In either case it’s important to understand that the message has been received and understood.

Themessageisinthemedium

The format of the message plays a role in the emotional response and how people will think about the importance of the message. It is important for the communicator to understand the format, style, size and medium for communication.

If the format of the message is not appropriate for the message’s importance it is likely not to be read or understood. It is important to select the appropriate format for delivering the communication. Messages of a personal nature need to be communicated and more personal format and not delivered through web postings and blogs. Personal communications should be delivered perhaps in person or over the phone or through videoconferencing. A one-on-one personal meeting shows the or demonstrates the importance of not just the communication but also of the person receiving the communication.

The format and style message can determine the emotional response from your stakeholders. The medium will affect the level of importance, interest and understanding of the message.

An email blast is not as personal as direct communication.

Use this communication opportunity to help build relationships with your stakeholders. Use your understanding and relationships with your stakeholders to help improve communication.

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Influential stakeholders need personal communication. Early and frequent communication can help gain support from critical stakeholders.

Another part of a communication plan should be to anticipate resistance and build mitigation plans for foreseeable resistance. Most initiatives require positive interaction with people for the initiative to be successful. This is where Organizational Change Management comes into play as we can influence the people aspect of major changes in the organization.

Communication is a key business skill and is fundamental to project management and service management. Communication should be efficient, responsive, professional and effective. Don’t waste time on needless communication.

Communication methods can include:• One-on-One / Face to Face meetings• Workshops• Telephone calls• Email• Instant Messaging (SMS)• Social Media

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Feedback is important aspect of communication, the receiver of the message must be asked that they understand the message. Generally messages with no response are not effective.

Communication is a two-way process and requires feedback. Feedback should be solicited and people must feel safe to offer feedback

The service provider or organization should allow for anonymous feedback from silent resistors. You may want to ask for contact information so you can comment on the feedback and let the staff or users know that you are working on their concerns. If the feedback is anonymous it’s hard to respond to let those concerned know we are actually working on the feedback provided.

Feedback should be acknowledged and the sender of the feedback should be informed on how the feedback is being used. If the people sending feedback do not get a response they may be reluctant to provide feedback in the future.

As communication is a two-way process we need to transmit a message but also ensure we get feedback from the recipient on the fact that they received the message and that they understand the message. Listening to feedback from stakeholders is a very important aspect of understanding the needs of the stakeholders. You have two ears and one mouth, you should do twice as much listening as speaking.

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Feedback should be actively solicited. A service provider needs to have defined feedback channels that are available and are easy to use. We might have a feedback email account along with other social media accounts for obtaining feedback from stakeholders. Other types of feedback may need higher levels of privacy or anonymous feedback.

People should feel safe about offering feedback. If people feel that they will be negatively affected when offering feedback they will tend to be silent. And sometimes they could be ‘silent resistors’ where they are actively resisting any of the new changes. This can be addressed through anonymous feedback as one option. One challenge with anonymous feedback is that you cannot respond without presenting the identification of the person providing the feedback.

Feedback allows us to monitor the communications or level of success of the communications. Feedback allows you to understand the message was received as you had intended. One part of the feedback is you want to ask the recipients of their understanding of the communication. If the feedback is not in line with the communication you can tune your communication based on the feedback. This will improve your ability to communicate and address different audiences.

All feedback should have a response. If feedback is perceived as going into a black hole then stakeholders won’t bother providing feedback.

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The service provider must first understand the metrics in order to understand what and why something should be improved. Most organizations have monitoring systems in place that will provide metrics and the capability to analyze those metrics to provide meaningful information for well-informed decision-making. As part of the decision-making process is critical to know how something was measured in the appropriate context. Each of the four dimensions of service management should have appropriate metrics to ensure the organization is proceeding with improvements in a holistic manner.

The purpose of the Measurement and Reporting practice is to support good decision-making and continual improvement by reducing uncertainty. This is achieved by collecting relevant data and assessing it in appropriate contexts.*

Data from measurements can be aggregated into meaningful metrics. These metrics can be consolidated into information for making well-informed decisions. Metrics can also be used to support indicators that are linked to objectives. For metrics to be used as an indicator a target or trend value should be assigned. Reporting can be done on the variance or deviation from the assigned target valve. Reports should offer some meaningful conclusion and not just a set of organized data. The report should analyze the metrics to develop these conclusions.


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Definition: Measurement A means of decreasing uncertainty based on one or more

observations that are expressed in quantifiable units.*

Definition: MetricA measurement or calculation that is monitored or recorded for management and improvement.*

Definition: IndicatorA metric that is been used to assess and manage something.*

Definition: ReportA detailed communication of information or knowledge about a topic or event.*

Reports should be organized in a way that will communicate the intended information to the appropriate target audience. Reports are often in different formats such as tabular, narratives or graphics. Reports generally cover a specific period of the time or a specific event. It is important to understand the intended audience when developing reports as with any communication it is important to understand the stakeholder that will be reviewing the communication and to ensure that the report is in a format that the stakeholder can utilize for making well-informed decisions.


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Determining which item to measure can be very difficult. It is often tempting to try to measure everything but this approach tends to be very wasteful in resources both technical and personnel. It is very difficult to distill copious amounts of information without having specific objectives or contexts to place that information and data.

Each part of the service I system should be measured to ensure that it is functioning in achieving its objectives. These measurements can highlight the parts of the service life system that need to be approved. The this measurement reporting on the service value system will ensure that improvement initiatives are made based on well-informed decision. Making.

Measurement and reporting should be reviewed for relevance. Just as report was necessary year ago does not mean it’s important today. As the organization changes and modifies objectives so should the measurement and reporting be modified to support the current structure and the target environment and the decision-making process to achieve the target environment.

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Why do we measure?

It is important to understand that the measurements are aligned directly or indirectly to organizational objectives that support the direct plan and improve activities of the organization. The organization must understand why something is being measured and how will the metrics be used. The definition of the metrics and measurements should be agreed upon prior to measuring the products, services and service components within the organization. The four primary reasons that for measuring and reporting include:

• To Validate• To Influence• To justify• To Intervene

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To Validate

To Influence

To Justify

To Intervene

By measuring achievement against targets or objectives, past decisions can be validated

By defining measurable targets, an organization sets the direction for activities and sets expectations for outcomes. It is important to understand how each metric influences people, as the effect of the measurement on behavior and expectations is not always what was intended.

Use metrics to justify with evidence or proof that a course of action is required. For example, metrics produced to support a business case.

Measurements can be used to preemptively identify point of intervention, including for subsequent changes and corrective actions.

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One of the reasons for measuring is to influence behavior. The act of measuring something will influence the behavior of people either positively or negatively. When we measure something we are stating that activity is of value and the people are getting measured they will tend to prioritize the activities that are actively being measured over other activities. Organizations need to ensure that for these measurements they are receiving the intended change in behavior and that these changes are understood and planned.

Measurement reporting should not be for assigning blame. Any deficiencies should be viewed as opportunities for improvement.

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Measurements metrics should align with higher-level requirements such as indicators objectives and ultimately the purpose And vision of the organization. There are various methods for aligning measurements and metrics to the organizational strategy and objectives. Some of these include:

• A planning and evaluation model• A balanced scorecard• And IT component to scorecard hierarchy• And organizational improvement cascade

The planning and evaluation model focuses on having organizations measure the right things. This is done by linking the metric and measurement to different organizational outcomes that the organizations want to wants to fulfill.

When defining key performance indicators it is important to make sure that these indicators are relevant and achievable. A common acronym used when defining KPIs is referred to as smart ( specific, measurable, achievable, relevant and time bound)

Defining KPIs will influence the behavior of the people that are being measured. Often KPIs can be referred to as aspirational meaning that they are targets that the organization has set. These KPIs may encourage different activities that will support the achievement of objectives and not just a reporting data point. One caution to note is that you will receive the behavior that you and sent incentivize.

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The planning and evaluation model topics include:

PurposeWhy are we doing this?This is the core mission being articulated. Everything we do as a organizations should support this purpose statement.

ObjectivesWhat would a successful result look like? Were the characteristics of success?Objectives are used to define what should be achieved or created to ensure that the desired purpose can be fulfilled there typically several objectives associated with the purpose. Each of the objectives will need to be measured and acted upon individually.

IndicatorsWhat measurable results would indicate success? How many different indicators are needed for effective evaluation?To evaluate the achievement of active a balanced set of indicators should be defined based on relevant metrics. For each objective there is at least one but often several measurable elements that can indicate whether or not the outcome was successful.

MetricsWhat are the numbers? How many metrics for each? What percentage of all items were recorded?Metrics are used to collect data for evaluation and assessment. It is important sure that the data is relevant, accurate and reliable. Every indicator should be based on up-to-date metrics.

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Balanced ScorecardThe balance scorecard was created to help define measurements and metrics. The balance scorecard focuses on four primary areas that show how well the organization is performing. An organization performing well in one or two of the areas may be lacking in the other areas. An organization is seen as being more successful when there these four areas are relatively balanced in their metrics and capabilities.

The four areas of the Balance Scorecard include:

CustomersThis perspective recognizes the importance of the customer experience and customer satisfaction

FinancialFocuses on the traditional management of finances of the organization

InternalbusinessprocessThis perspective helps to understand the health of the organization’s internal workings. It is a good leading indicator of future performance if the organization’s processes are working well.

InnovationlearningandgrowthThis perspective is linked to continual improvement. It includes training and development, management of knowledge and other approaches to ensure that the organization can develop.

Often these perspectives are linked to key performance indicators KPIs that will be tracked over time. These KPIs can be cascaded from a team to a department to the entire overall organization.

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The concept of the watermelon affect is that from the outside everything looks green but on the inside everything is read. This concept refers to the KPIs a metrics being established that are not driving the right behavior in leading the service provider to think that the customers are satisfied when they are not.

Success factors describe a condition that must be achieved in order for an objective to be considered successful. Practices have practice success factors. Key Performance Indicators or KPIs indicate or support the success factors.

There will be a hierarchy of success factors that each success factor may contain multiple key performance indicators to show or demonstrate the success factor.Ensuring that changes are realized in a timely and effective manner

Minimizing negative impact of changes

• Change success rate over time• Timeliness for individual changes• Satisfaction with change timeliness• Satisfaction with change outcomes

• Number and duration of change related incidents

• Business impact of change related incidents

• Impact of changes as the source of problems

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Value stream mapping is an important concept within Lean. The primary focus of lean is to maximize customer value while minimizing waste. The concept of lean wants to use fewer resources and create greater value for the customers. Lean thinking encourages optimizing the flow of products and services through the value stream not focusing on siloed technologies.

Lean focuses on breaking down large pieces of work into smaller batches. This helps achieve a short lead time as a effective way to ensure quality and customer satisfaction. Small batches help reduce any disruptive effect of changes on production systems. As changes are smaller the risk is also diminished. Reducing the impact and size of changes also allows the frequency of these changes to increase thus enhancing the organizations ability will be to absorb a larger volume of changes.

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The value stream mapping is a way to document or visualize the flow of work starting from demand through the service value chain activities and ultimately ending at value. Value stream mapping is a method that originated in lean manufacturing. The value stream map provides an insight into the organizational workflows and to help identify value-added and non-value-added activities. The value stream map can be used to document the flow of work in its current state to help identify opportunities for improvement. Value stream mapping has been used by documenting the future or desired state to understand how the service provider will then transition from the current state to the desired state.

Local optimization is the focusing on individual processes instead of focusing on the entire value stream which can utilize activities from multiple processes. It is easy for the departments or teams to focus within their scope of control. Local optimization might improve one activity in a value stream but may cause a bottleneck further down the value stream and make the overall performance less efficient. The focus should be on eliminating waste throughout the entire value stream instead of focusing on isolated processes. The value stream map is an excellent tool for understanding, optimizing and improving the entire service value chain.

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Demand

Value

Value streams are how the service provider will organize or coordinate work for multiple practices to achieve value for the stakeholders. The value stream consists of a set of steps that add value to the work that is being processed. The value stream begins with demand and follows the activities through to value realized by the consumer. The activities within the value stream can come from multiple practices and processes. The value stream can then help ordinate the activities within these disparate practices and processes.

Focusing on the value stream helps us identify the workflow and practices involved in a particular situation. The value stream started as a lean approach to optimize workflow and to eliminate waste. The value stream map will help the service provider focus on the collaboration of the different practices to deliver the product and services that co-create value for the customers and other stakeholders. This will help the service provider from not focusing solely on isolated processes without taking into account the big picture or a holistic view of the end in set of activities required to deliver a product or service.

The value stream will build on the core Service Value Chain activities. The value stream can be thought of as a big picture of the value creation for the customer by utilizing the practices and specific resources performing the tasks along the way.

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Value streams and processes provide a way to organize the work in a sequence from demand through activities to achieve and realize value. Organizations will map their value streams to identify current work and highlight opportunities for improvement. These improvement initiatives can help eliminate non-value added activities and waste in the workflow thus increasing productivity.

Value streams and processes are not the same. They do have many common traits. Both the value stream and the processes are concerned focused on activities and workflow. The value stream map records the movement of information and resources across the workflow. Processes can be mapped to demonstrate a series of activities to achieve a specific outcome. Both processes and value streams define activities with inputs and outputs.

One of the key differences between the value stream and process is how they are used. In a rudimentary definition of a process any set of interrelated activities that transforms inputs into outputs can be considered a process. A value stream might seem to fit this definition. A major difference is that the value stream focuses on the flow of Activities across processes to co-create value and not the performance of a single set of activity.

Value streams maps tend to be graphical in nature focusing on the end and holistic workflow. Individual steps are highlighted that can be improved or eliminated as part of the value stream mapping.

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Organizations and People

The organizations and people dimension covers the formal organizational structures, culture roles and responsibilities and staffing levels with their competencies. Measurement of the Organizations and People dimension includes:

• Team performance• Staff retention• Training

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Information and technology dimension

Measurement of the information technology dimension is perhaps one of the easiest to accomplish as there are monitoring tools that can handle the discrete elements very reliably. The challenging part will be choosing the measurements that add value and relevance to the situation without trying to measure all of the technical components that can be measured.

Besides technology information and knowledge is part of this dimension and it is important to ensure that appropriate knowledge for managing services can be measured and reported on. Does a service provider have sufficient knowledge and expertise to manage the services and to manage new services that are being offered in the organization?

Measurements can include:• Interface or component performance• User transaction times• Connectivity metrics

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Partners and Suppliers

The measurement of partner and supplier performance is critical to the success of the relationship. The transparency and open communication between the service provider in the service consumer can be enhanced through good measurement of key performance indicators and success factors. The measurement and metrics should not be used as a tool for placing blame but should be used for information sharing instead.

Most external partners and suppliers will have an agreed-upon service level agreement between the organization and the support detailing the services and the expectations of the customer for the delivery of the service. Many targets and metrics can be defined within the SLA. The targets in the escalation be adjusted as the business environment and the organization changes through normal progression. The SLA should not remain static for years and years.

Metrics and measurements for partners and suppliers can include:• Compliance with applicable regulations• Conformance to terms in the SLA• Social responsibility• Reliability and agility in meeting the changing needs of the customer

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Value Streams and Processes

Value streams and processes should be measured to ensure that the value stream is supporting the objective efficiently and effectively. Measurements of the value stream should highlight throughput and workflow and identify bottlenecks to achieving objectives effectively.

Processes can be measured and should be measured to determine how well the process is supporting its objectives in providing value to the organization. As processes mature the emphasis on what is being measured would shift from effectiveness to efficiency metrics for example. There should be a balanced set of metrics used to measure the process without over measuring or obtaining too many metrics that would just lead to confusion.

Process metrics include• Progress• Compliance• Effectiveness • Efficiency• Productivity

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Metrics can tell us about what has happened in the past but also can be used to predict future trends.

LaggingindicatorsMetrics that report on what has already happened. Lagging indicators are common in SLA reports and are used for historical trending.

LeadingindicatorsMetrics that predict what is likely to happen in the future. The leading indicators are often difficult to measure. There is sometimes a cause and effect relationship that if item “A” occurs then item “B” will not occur. For example if the price of a barrel of oil increases, this will be a leading indicator that the cost of airline plane tickets will also increase.

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Flow efficiency is a major component or focus of the Lean principles. Some key metrics from lean include:

Work in progress (WIP)The measure of unfinished work items. The work in progress metric highlights the progress being made towards reducing the work in progress queue

Cycle timeThis is a measure of time between a work item starting and finishing. This is a lagging indicator of flow as the activity has already occurred. This measurement helps manage expectations about the duration of work items.

ThroughputThroughput is a measurement of number of work items finished in a period of time.

Work item ageThis is a measure of the amount of time active items have been in progress. It is a leading indicator of unfinished items and highlights bottlenecks or blockage in the value stream.

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Service relationships with partners and suppliers should include the concept of value co-creation. The service supplier and the service consumer should have a when relationship. Value must be realized by all parties in the relationship.

The service relationship model demonstrates that a service provider is also a service consumer. In the diagram of the service relationship model we see a serial interaction more of a value chain in reality we can see complex value net environments.

There are generally three supplier and consumer relationship types and they are described as below:

• Basic relationship• Collaborative relationship• Partnership

The basic relationship is very reactive and ad hoc with little information sharing between the service provider the service consumer. An example could include buying products online from a supplier. The basic relationship will be price driven and easy to exit the relationship to find other suppliers if and when appropriate.

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The collaborative relationship has a relationship as a trusted advisor with the mutual understanding of the needs of the service provider and the service consumer. In a collaborative relationship there is a sense of value and the service provider’s portfolio is aligned to the business needs of the service consumer. There will be many points of contact.

The partnership relationship is more strategic in nature where the service consumer and service provider share common goals focusing on value to both parties. There will be a clear accountability to the achievement of value. The partnership will have shared goals for maximizing value and shared rewards. There is generally deep rooted trust in the relationship.

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As a way to manage the supplier and multiple partner relationships, many organizations have turned to Service Integration and Management.

There are four main models for Service Integration and Management:

Retained service integrationThis is where the organization has manages and coordinates all vendors and coordinates the service integration and management function itself.

Single providerThe vendor provides all services as well as the service integration and management function.

Service GuardianThis is where a vendor provides the service integration and management function along with one or more delivery functions in addition to managing the other vendors.

Service Integration as a ServiceThis is where a vendor provides the service integration management function to manage all other suppliers. In this case the vendor does not provide any other services to the organization just the service integration management function.

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The guiding principles will guide an organization in all circumstances. The Guiding principles will be used to support the direction, planning and improvement of the organization. The guiding principles include the following:

Focus on ValueValue is central to IT service management. Everything that the service provider does should be focusing on value to one of the stakeholders whether internal or external to the organization. Sufficient levels of value will need to be created or changes will need to be made in the organization. Value can also encompass the customers and users experiences.

The Guiding Principle of Focus on Value ensures that the provider understands the customer and the customer’s perception of value. This will help ensure that values created for all cycle. Value can be in the form of:

• Revenue• Loyalty• Lower-cost• Growth opportunities

Each value stream will decline define a specific series of activities through the Service Value Chain from demand to value. The organization will apply the governance system to ensure that the value stream generates value for all stakeholders. The value reflects a balance between risk, benefits and resources.

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Start Where You AreIt is important to have an accurate view of the current state prior to jumping into any improvement initiative. When planning improvements it is important to validate what is already providing value and therefore focus the improvements on preventing or eliminating waste.

Start Where You Are is guidance that requires the service provider to understand their existing capabilities and starting point before jumping into improvement initiatives. One key point is to identify practices and processes that are working well in one area of the organization that can be leveraged and reused in another area. The concept of start where you are should be applied to value streams and processes.

The assessment should allow the service provider to understand the current state and determine what can be leveraged and reused to achieve the desired state.

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Progress iteratively with feedbackThroughout the improvement initiative the service provider should be asking for and receiving feedback through different iterations of the process. It is important for the organization to feel safe to be able to provide the honest feedback necessary for making decisions on improvements and other initiatives.

Progress Iteratively with Feedback will support the service provider and improve the overall improvement effort getting feedback from stakeholders through the different iterations of the improvement initiatives. The surf provider should use the feedback to improve in between initiative so the next initiative or the next iteration will be improved over the previous iteration of the improvement initiative.

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Collaborate and promote visibilityPeople work better when they feel included and understand the scope of work being performed. Having people actively engaged will provide for better decision-making and better results.

Collaborate and Promote Visibility is an important concept in ensuring that there is cooperation and collaboration between groups to ensure the success of the organization. Working in silos may have different departments focusing on different objectives that may not be properly cascaded or lined. The concept of Collaborate and Promote Visibility should break down the silos and the support active collaboration and communication.

Think and work holisticallyIt is important to understand how activities overlap with others. The service provider and the organization must take into account the entire Service Value System and all of its components that are likely to be affected. The organization should understand the end to end perspective before making any improvements.

The concept of or the guiding principle of Think and Work Holistically guides us to understand that no service, practice or process is isolated. In value stream mapping it is critical that we understand the whole environment to create value rather than focusing on individual singular activities. When thinking holistically the service provider must consider the Four Dimensions of Service Management that are being utilized to create the products and services that facilitate the co-creation of value.

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Keep it Simple and PracticalStreamline the workflow whenever possible. Complex instructions and plans are difficult to follow.

Keep it Simple and Practical is a common phrase that has been around for a while. This implies that the provider will focus on the outcome. A value stream or process should use the minimum number of steps necessary to achieve the outcome or objective. Outcome based thinking allows us to focus on what is necessary and only what is necessary to achieve the objective. Concepts associated with the Keep it Simple and Practical principle include:

• Ensure value• Leverage simplicity• Do fewer things better• Respect people’s time• Easier to understand, easier to adopt• Maximize quick wins

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Optimize and AutomateAll parts of the organization and the service value system should be optimize and improved as much as possible that adds value. Complex plans are difficult to implement and improvements are often targeted at optimizing the way we work and provide services.

Technology can help an organization scale up to meet demand on repetitive tasks allowing the service provider staff to focus on more complex issues and complicated decision-making. Automation and optimization provides the means to make an activity or process more effective. The activity must first be simplified before automated and consider the financial, regulatory compliance, time constraints and also resource availability in deciding what and how to automate. Automation may increase the speed of specific activities, but the cost of that automation may outweigh the benefit of the increased speed.

ITIL® primarily focuses on optimization through continual improvement that relies heavily on measurement and reporting to support this optimization. Other frameworks such as Lean, Kanban also focus on optimization. Regardless of the framework there are some high-level steps that will be applied that can lead to optimization:

• Understand and agree the context in which the proposed optimization exists

• Assess the current state of the proposed optimization• Agree with the future state and priorities of the organization should be,

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focusing on simplification and value• Ensure the optimization as the appropriate level stakeholder engagement

and commitment• Execute the improvements in an iterative way• Continually monitor the impact of the optimization

Automation generally refers to the utilization of technology to perform or to support the performance of an activity with little or no interaction from the service provider staff. Automation should be applied across the organization first though looking to automate those tasks that have been standardized and repetitive. Focusing on the standard and repetitive tasks to reduce organizational costs and reduce human error.

One of the key elements of automation is the concept of simplifying the process before automating. The concept of garbage in garbage out should have us think about having an improved simplified process prior to automation. Beginning approaches in automation and organization should start with standardization of repetitive tasks and to defer complex activities until those activities have been well-documented and simplified prior to automation.

The service provider must define the metrics that will be used to determine whether an optimization or automation activity has been successful. We must understand what the objective looks like prior to automation. These metrics will be used to create a baseline as a starting point to measure the achievements or improvements of optimization and automation.

When optimizing and automating activities within processes it is important that the service provider incorporate the other guiding principles that we discussed previously. These principles include:

• Progress iteratively with feedback• Keep it simple and practical• Focus on value• Start where you are

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Value stream mapping is important as it helps organizations to visualize the workflow across multiple processes. Historically organizations have focused on siloed process improvement and not on the value stream and the entire set of activities to create value. The goal the value stream mapping is to identify and remove waste. This will help to identify, plan and implement improvements to the value streams.

The first step in value stream mapping is to document the current way of performing the work to establish a baseline. The baseline can then be analyzed to identify activities that do not add value and can be classified as waste and eliminated. It is important to ensure that all activities performed are documented within the value stream as some activities may not have been formally documented as part of a process but are performed outside of the process scope of control and documentation. Collaboration is an important tool in helping to identify activities as part of the value stream map.

After the current state has been mapped, improvements can be identified to determine what the future state of the value stream workflow of activities will look like. At this stage the focus is primarily on identifying and eliminating waste

Definition: Value Stream MapA visual representation of a service value stream which shows the flow of work, information and resources.*


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The value stream map will detail the flow of steps to achieve an objective. The information will start of the basic level so the value stream can be understood by all parties reviewing it. The value stream will need to be more detailed for the analysis of specific portions of the value stream map. This detail will help in quantifying the workflow and identifying wastes that can then be eliminated. Too little detail in the map will be difficult to use for improvements, too much detail in the history map will be very confusing. There must be a balance to the level of detail within the value stream map that suits the audience that is trying to analyze and identify improvements.

Value stream maps use symbols to represent different aspects of the value stream. These symbols help clarify the value stream map. Many of the symbols refer are referring to waste that should then be eliminated.

while improving the flow of work through the value stream.

As the organization moves from the current state to the future state of the value stream the organization will need to develop new future state value streams to keep the momentum of improvements going. The value stream mapping and remapping should be a continual ongoing improvement initiative.

Best practice time frames for improvement initiatives should be limited to three months time spans. The shorter time frames allow for quick progression and help maintain momentum. If an improvement initiative last longer than three months it she should be broken down into phases that can be implemented within a three month time span.

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Value Stream Mapping is used to find inefficiencies and waste. Types of waste can include:

MudaWaste, uselessness, futility. These are things that are being done which add absolutely no value

MuriOverburden, excessiveness, or on reasonableness. Caused by rigid service time frames, release windows and other such time constraints.

MuraVariability, unevenness, nonuniformity, irregularity. Unacceptable variation or impediments and ways of working or workflows

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Common questions when designing a workflow include:• What caused the work to start?• What information is required to create the desired outputs or outcomes?• When will the information be available?• Which steps need to occur and in what order to achieve the required

output? • Can steps be performed in parallel?• What artifacts are created by the workflow?• What value does each step create for the stakeholders?• Which policies must the process of value stream comply with?• What aspects of the workflow will be measured? • How will the data be formatted and used?

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Package templates offered a good starting point for process designs. These templates may be found in reference materials for the various service management frameworks that there are being considered or from other organizations. When using these package templates the organization needs to assess and determine whether they are suitable for their needs and if there’s any modifications from the core template that needs to be addressed.

Metrics for the design and measurement of the workflow include:• Cycle time• Wait time• Lead time• Process queue• Work in progress• Throughput

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The Theory of Constraints is a method for looking at the flow determining bottlenecks based on a series of constraints. The basic construct of the theory of constraints is that the throughput of the system is determined by one constraint. Removing these constraints will improve the flow through the system.

Steps to improve constraints1. Identify the process constraints2. Decide how to best exploit the processes constraints3. Subordinate everything else to the above decisions4. Evaluate the process constraints5. Remove constraints and reevaluate the process

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Kanban is a set of principles and activities aimed at developing a predictable constant flow of work. Work can be accelerated by using a pull based triggering mechanism. The whole mechanism allows the customers to pull the work through the value stream. This pull based system provides an advantage that work is not published on two people thus burdening them unnecessarily and unproductively with work they cannot yet manage. This concept is referred to as overburden as part of Lean.

The main practices of Kanban:• Visualizing work• Limiting work in progress• Managing flow• Explicit policies for the process• Feedback loops• Improve collaboration• Evil experimentally

Definition: KanbanA lean method based on a visualized pull-based workflow that manages and improves work across human systems by balancing demands with available capacity, and by improving the handling of system-level bottlenecks.*


itil® 4 strategist: direct, plan & improve (dpi) · 2020-07-14 · itil® 4 strategist:...

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