There is certainly a debate about ITIL 3 vs. ITIL 4. You have ITIL 3, which has been successful due to its numerative approach. It provides detailed processes and procedures for managing IT services. However, with the introduction of ITIL 4, there has been a shift towards a more flexible and adaptable approach.
On the 38th Episode of Ticket Volume, our IT podcast, David Billouz delved deep into the core differences between the two frameworks and shed light on the expanded scope of ITIL 4. One of the key highlights of this discussion is the exploration of Value Streams. He took us on a journey through this innovative concept, explaining how organizations can identify, map, and optimize the value they deliver to customers.
David Billouz is an accomplished ITIL Master, ITIL 4 Co-author and Assessor, and ITIL v3 Expert. He currently holds positions as a Partner at NH Prague Knowledge Centers and President at OCIRIS. With his extensive experience, including roles as an ITIL Product Ambassador for AXELOS and Auditor at PeopleCert, he brings a wealth of knowledge to the field of IT service management.
Don't miss out on the chance to listen to the whole episode and learn more from Billouz’s input. And don't forget to mark your calendar for our monthly live recordings too. By signing up today, you'll have the opportunity to get valuable insights, ask questions in real-time, and broaden your understanding of ITSM.
ITIL 3 vs. ITIL 4: Welcoming ITIL 4
David Billouz recognizes the value of the IT Service Managment (ITSM) online community and aims to give back knowledge through initiatives like "Back to ITSM." His first encounter with ITIL occurred during his time as an IT manager at Renault, where he learned about business continuity management. Applying service management processes, such as ITIL, offers the advantage of standardization, fostering good customer relationships and efficient operations.
To facilitate understanding of service management, Billouz emphasized the importance of concrete examples and highlighting the triggers and relationships between users, customers, and decision-makers. And said he is excited about ITIL 4 and acknowledged the interesting changes it brings, even if some aspects may not be immediately popular.
"The main difference between ITIL 3 and ITIL 4 is that in ITIL 4 we are in a conceptual model. Up to ITIL v3 you are in a numerative model, that must meet the success of ITIL because people hate thinking, they want ready-made solutions. They want ‘Okay I take this book I open it, I know what I have to do to manage an incident’. (...) They are not processes anymore, they (ITIL 4) are practices. You have to think about the tools that you can use, about the level of maturity of your users and so on and so on, and then comes with this service value system and the service value chain. It's a model, but it's a model that you have to use each time in a different way."
He explained the adoption of ITIL 4 concepts, such as the value stream-based approach, can be facilitated by utilizing ITSM tools that align with this conceptual model. These tools play a crucial role in visualizing and measuring value, enabling organizations to effectively implement and leverage ITIL 4 principles.
He believes these new generation tools, can accelerate the adoption of ITIL 4 and enhance their ITSM practices. They seem to allow organizations to streamline their processes, identify areas for improvement, and measure the value delivered to customers.
On that note, success stories, like the implementation of ITIL 3 principles through platforms like ServiceNow, highlight the relevance of effectively applying ITIL principles with the support of appropriate tools.
The Service Value System
In the realm of Service Management, there has been a shift from focusing solely on processes to embracing a broader concept known as the service value system. This shift emphasizes the need to think beyond individual processes and instead consider the overall system within which these processes operate.
One of the key distinctions between the traditional process-centric approach and the service value system is the concept of value streams. While processes are typically specific to either IT or business functions, value streams are cross-functional sets of activities that do not differentiate between IT and the business. They provide a holistic view of the end-to-end activities required to deliver value to the customer.
Billiouz pointed out the several advantages that value streams offer over traditional processes. They provide quick feedback opportunities, allowing organizations to continuously improve and adapt. Additionally, they have a strategic focus, addressing a large number of demands on services rather than individual tasks or activities. This strategic approach ensures that organizations are delivering value in a way that aligns with the needs of their customers.
While process optimization is typically done in isolation, value stream optimization requires a holistic perspective that considers the interconnectedness of sub-processes and their contribution to the overall value delivery. This strategic approach to optimization has a significant impact on teams and companies, driving efficiency, effectiveness, and ultimately customer satisfaction.
Value management plays a critical role in optimizing value streams. It involves three key aspects:
- Value delivery refers to the transfer of created value from the service provider to the consumer.
- Value creation occurs when the service consumer utilizes the service to achieve their desired outcomes.
- Value capture involves the service provider capturing the value they have created through appropriate pricing and revenue models.
Billouz couldn’t stress enough how much value management plays a crucial role in this process, ensuring that value is effectively delivered and captured throughout the value chain.
Relationship between Service Management and Value Management
Service management and value management are related concepts, but they are not synonymous. Value management has been a practice for many years, particularly in the context of Industry 4.0 and product service systems. In this context, manufacturers deliver a combination of products and services to manage value for their customers.
Everybody talks about value, but explain value with service management. (You have to) explained value with value management, (and) you have to explain service with service management, but you don't have to mix it up."
Value Management involves capturing value throughout the entire value chain, including the delivery and maintenance of products and services. For manufacturers involved in maintenance and repair, value capture becomes an important aspect of their operations. Building strong relationships with customers through these services is crucial for effectively managing value.
In addition, Value Management can be applied to non-revenue-generating initiatives. While businesses traditionally focus on measuring revenue-generating activities, it is interesting to apply value management principles to non-revenue-generating initiatives as well. For example, measuring the return on investment (ROI) of incident management becomes possible at a certain level of maturity.
Overall, Billouz explained they are interconnected, with value management encompassing the broader scope of capturing value throughout the value chain, including maintenance and repair services. Applying value management principles to both revenue and non-revenue-generating initiatives can provide valuable insights and help organizations optimize their operations.
That's what we wanted to share: ITIL 4 emphasizes the importance of continuously managing and optimizing value throughout the service lifecycle. But, this is just a summary of Ticket Volume's episode featuring David Billouz. There's a lot more to discover in the recording. Be sure to listen to the full conversation with Matt Beran to enjoy the debate about ITIL 3 vs. ITIL 4.
You can find the full episode on popular platforms like Apple Podcasts, Spotify, YouTube, or any other podcast platform you prefer. Remember to subscribe if you're interested in joining the monthly live recordings!