The key concepts of ITIL 4

Service value chain

Syllabus
5. Understand the activities of the service value chain,
and how they interconnect
5.1 Describe the interconnected nature of the
service value chain and how this supports value
streams
5.2 Describe the purpose of each value chain activity:
a) Plan
b) Improve
c) Engage
d) Design & transition
e) Obtain/build
f) Deliver & support

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What you will learn
By the end of this topic, you will be able to:
• Describe the interconnected
nature of the service value chain
and how this supports value
streams
• Describe the purpose of each
value chain activity

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Introduction to the ITIL service value
chain

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Figure 4.2 The ITIL service value chain
Opportunity vs demand

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Converting inputs into outputs
For example, the engage activity might utilize
supplier management, service desk management,
relationship management, and service request
management to respond to new demands for products
and services, or information from various stakeholders.

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Service value chain, its practices,
and value streams
Here is an example using a mobile application development
company which utilizes a number of practices, supported
with specialized resources and techniques, such as:

software
service
business development release service
validation
analysis and management desk
and testing
management

Although the high-level steps are universal, different products and clients
need different streams of work.
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Service value chain, its practices,
and value streams
The development of a new Fixing an error
application for a new client in a live
starts with initial engagement application.
(pre-sale)

Changing an existing Experiments with

application to meet new new or existing
requirements of existing applications to
clients expand the target
audience

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Axle’s value chains
and value streams
At Axle Car Hire, the value chain is the way that our
company operates. It has multiple value streams. Each
value stream adopts and adapts the activities of the
value chain for performing particular tasks. For example,
there is one value stream for innovation and another for
Henri: CIO, Axle Car Hire providing standard services to existing customers.

The value stream for providing standard services to existing

customers represents the activities that are performed when
a customer hires a car. This starts with engagement, when a
customer contacts Axle. Then it proceeds to delivery, when the
customer receives a car (although engagement can still happen
at this stage).

Some value chain activities might be ongoing throughout a

particular value stream or might not be involved at all. In this
stream, planning activity is continuous, but design and
procurement activities will typically not be involved. The
stream ends with more engagement activities, when cars
are returned by customers, feedback is given, and
orders are closed.
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Axle’s value chains
and value streams
Value chain activities do not have
Marco: IT delivery manager, Axle Car Hire
to happen in a particular order.
Axle’s innovation value stream is
triggered by opportunity, and then
goes to planning, designing, building
or obtaining, transitioning, and finally
to delivering. This stream often
includes procurement activities. For
example, we procure software and
hardware for our biometric solutions.

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Axle’s value chains
and value streams

Henri: CIO, Axle Car Hire

We manage value streams for

different objectives, combining
the value chain activities and
supporting them with practices.
Every value stream should be
effective and efficient, and subject
to continual improvement.

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Value chain activities: plan

The purpose of the plan value chain activity is

to ensure a shared understanding of the vision,
current status, and improvement direction for
all four dimensions and all products and services
across the organization.

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Value chain activities: improve
The purpose of the improve value chain activity
is to ensure continual improvement of
products, services, and practices across
all value chain activities and the four
dimensions of service management.

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Value chain activities: engage

The purpose of the engage value chain activity

is to provide a good understanding of stakeholder
needs, transparency, and continual engagement
and good relationships with all stakeholders.

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Value chain activities: design
and transition
The purpose of the design and transition value
chain activity is to ensure that products and
services continually meet stakeholder
expectations for quality, costs, and time to market.

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Value chain activities: obtain
and build

The purpose of the obtain/build value chain

activity is to ensure that service components
are available when and where they are needed,
and meet agreed specifications.

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Value chain activities: deliver
and support

The purpose of the deliver and support value

chain activity is to ensure that services are
delivered and supported according to agreed
specifications and stakeholders’ expectations.

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