ITIL / ITSM

The Best Explanation of ITIL Value with Examples

Not only in ITIL, in every framework that delivers, value is at the core of what makes or breaks it. Value is the essence of products, services and everything in between.

So what is value? It’s a simple English word that means something that is useful. In ITIL, the end user is all-powerful. Value is defined through the user’s eyes. So, as a service provider or a product manufacturer, you can claim to create value for your end user but the ultimate judge would be the end user. Many products and services that are well intentioned because it was created to deliver value, but the end user felt that its value did not meet the expectations against the price paid for it.

Value is subjective. Value to one user may not be valuable to another. Consider this. My friend would pay the full asking price for Apple phones. He is in love with it and for him, it’s value. The money he pays is worth every penny. For me, I am no Apple fan. I have used iPhone in the past and compared to Android phones, I feel that there is a lot more room to maneuver as a techie in an Android phone. I personally prefer OnePlus phones and the performance and the features they offer are worth the money I pay for them. This is my perception. My friend disagrees. In his view, there is no other competitor to iPhones. So value is like beauty. It’s seen through the eyes of the beholder.

Business 
Outcomes 
Perception

Consider this graphic against the real life example. Value is at the center of perception, preferences and business outcomes or simply outcomes. I have certain perceptions around Android and iPhones and specific preferences. This combination works well for me as it achieves the outcomes that I wish. Likewise, my friend too is able to carry out his outcomes with an iPhone. So who is correct in our choices? We are both in the choices that we have made. There is no winner or a loser. As I mentioned earlier, it’s all about subjectivity. As long as the end user is happy with the outcomes, the product is good for him and likewise a different product for another person.

The official ITIL definition of value reads – The perceived benefits, usefulness, and importance of something.

Value Creation Process

I mentioned earlier that history is important for us to reflect on the evolution of changes. It was once believed, in ITIL V3 that value is created by the service provider and adding to that the perception and preferences, a service’s true value gets measured.

With time, and with the Agile ways of working and with the digital transformation, we have come to realize that a service provider or a product manufacturer for that matter cannot create value on their own. True value is created when both the service providers or product manufacturers and the users or their representatives put their heads together in imagining the end product that will deliver value.

Take the example of Agile methodology. A product owner defines that features of a product and the order of its importance. The product owner is from the customer organization and more importantly is a representative of all end users. He knows what the end user or a consumer needs. So when he works with a service organization to create a service, the end product will more often than not will be valuable to end users. So value is not created in isolation by the service provider but through collaboration between the service provider and the customer. Remember that value can never be created in vacuum. It needs to be jointly developed by those who build and those use it.

Three Aspects of Value

Affected 
outcomes 
introduced 
Risks 
introduced 
Value 
Supported 
outcomes 
Costs 
removed 
Risks 
removed

Value is essentially driven by three aspects. They are:

  1. Outcomes
  2. Costs
  3. Risks

Think about it. If you are a customer, and if you are purchasing a service or a product, you want it to achieve the outcome it promises, the costs must be reasonable and the risks associated with it must not be owned the end user but rather with the company offering the product or the service.

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