ITIL® 4: What is Value? (eLearning 4/25)

Summary

This lesson focuses on the concept of value, emphasizing its subjective nature and the importance of delivering value that is both appreciated and used by stakeholders. It highlights the difference between outputs (deliverables) and outcomes (results), stressing that value is co-created through collaboration between providers and consumers. The video also covers the significance of utility and warranty, ensuring that services are not only functional but also reliable. In essence, value in service management is about aligning functionality with performance to create a positive experience for customers, while understanding the roles and relationships of people involved.

Takeaways

• 😀 Value is subjective and depends on the recipient's perspective. It must be appreciated by the customer or stakeholder to be truly valuable.
• 😀 Value is not just about the outputs; it depends on the preferences and perceptions of those receiving it.
• 😀 A service is only seen as valuable if it delivers more than it costs, considering both outcomes and risks.
• 😀 Co-creation of value requires collaboration between providers and consumers to ensure everyone benefits from the service.
• 😀 ITIL emphasizes that value is co-created, meaning both the provider and the consumer must gain from the relationship for it to be sustainable.
• 😀 Focusing on outputs (deliverables) rather than outcomes (end results) can lead to inefficiencies. It's crucial to focus on the actual results the service delivers.
• 😀 An example of focusing on outcomes: a customer buys a drill not to own the drill, but to create a hole in something.
• 😀 Understanding customer needs and expected outcomes helps avoid providing unnecessary or poorly suited outputs.
• 😀 Utility (functionality) and warranty (reliability) are both essential for delivering value in IT service management.
• 😀 For a service to provide true value, it must have both utility (what it does) and warranty (how reliably it performs).

Q & A

What is the main focus of the lesson in the script?

The main focus of the lesson is on the concept of value in service management, particularly its subjectivity and how value is co-created between providers and consumers.

Why is value considered subjective in the context of service management?

Value is subjective because it depends on the perception and preferences of the recipient, whether that be a customer, stakeholder, or user. What is valuable to one person may not be valuable to another.

What does 'co-created' value mean in service management?

Co-created value refers to the idea that value is not just delivered by one party; instead, it is created collaboratively between both the provider and the recipient. Both parties contribute to the overall value derived from the service.

How does focusing on outputs instead of outcomes impact service delivery?

Focusing too much on outputs, such as deliverables or products, can lead to improving the process without necessarily meeting the actual needs of the customer. Focusing on outcomes ensures that the service actually delivers value and addresses the customer’s true needs.

What is the difference between an output and an outcome in service management?

An output is the tangible or intangible deliverable of an activity, while an outcome is the actual result or benefit that the recipient gains from that output. The focus should be on the outcome, as it reflects the value to the customer.

Can you give an example of how focusing on the outcome rather than the output can lead to better value delivery?

An example would be the use of a drill bit. A person doesn’t want the drill bit itself but rather the hole it creates. By focusing on the outcome (the hole), the service provider might suggest an alternative solution, such as a wireless bell, which could deliver the desired result more efficiently.

What are the terms 'utility' and 'warranty' used in ITIL service management, and how do they relate to value?

'Utility' refers to the functionality of a product or service and whether it is fit for the intended purpose, while 'warranty' refers to the assurance that the product or service will perform reliably and meet agreed standards. Both are necessary to deliver value effectively.

Why is it not enough for a service to be just functional in delivering value?

A service must not only be functional (utility) but also reliable, performing consistently and securely (warranty). If a service is unreliable, like a poor streaming connection, it cannot deliver true value, even if it has useful functionality.

How does collaboration between providers and customers help create value?

Collaboration between providers and customers helps ensure that the service meets the specific needs of the customer. By understanding the customer's perspective and needs, the service can be better aligned to deliver value, making it a mutually beneficial relationship.

What role do people play in the process of value creation in service management?

People play a critical role in value creation as they are involved in both the delivery and the reception of services. Their roles and collaboration are crucial to ensure that the service is aligned with customer needs and expectations, which makes service management successful.