One of the main concepts in ITIL 4 is co-creating value within service management. Co-creating is part of the ITIL 4 guiding principle ‘Focus on Value’, which not only emphasizes on understanding what generates the most value in a service, but also helps practitioners to achieve that value and optimize investments to maximize it for all parties.
In short, co-creation means opening the dialogue in developing products and services and recognizing value from the customer’s perspective.
Focus on value
ITIL often mentions the concept ‘value’, which is what any service should deliver. Value is the ‘perceived benefit, usefulness and importance of something’, according to the glossary of the methodology.
This means that value can be anything and that it is something very subjective. What can bring value for some can mean little to other stakeholders. For this reason, ‘delivering value’ has to be in the center of attention at any moment while practicing ITIL. Which is why ‘focus on value’ is the first guiding principle of all 7 ITIL guiding principles.
Value of service comes from what it enables someone to do and what the service is made of. A direct consequence of that is that it is the customer that determines the final value and not the provider. The following terms generally characterize the value of a service:
- Defined by the customer / end user
- Affordable mix of features
- Achieves the objective
- Changes over time and circumstances
Service Value Chain and Value Streams
In order to deliver value ITIL uses the Service Value System (SVS), which is a model that shows how all components and activities of an organisation work together to create value. The Service Value System can help create a unique and strong direction for the organisation. It defines the activities, workflows, controls and procedures needed to achieve the agreed objectives.
The Service Value System is made up by the Service Value Chain and Value Streams. The Service Value Chain is the generic reference model that creates value streams and is based on six main activities. The value streams are defined as ‘a series of steps an organisation undertakes to create and deliver services and products to consumers’. Value streams are unique to an organisation and need to be specified precisely.
The model of the Service Value System is closely related to the guiding principle ‘focus on value’ and drives organisations to co-create value in close relationship to their stakeholders.
In order to achieve ‘value’, an open dialogue and active collaboration between provider and stakeholders is needed. Everyone needs to agree on what ‘value’ means in order to be able to satisfy the genuine requirements of the customer. A definition of value is also needed in order to ensure a consistent and adaptable approach, which will allow ITIL practitioners to co-create value with the customer.
In the earlier days of service management, providers would simply create services that they thought delivered value. However, they only considered their own perspective as a service provider. They were more concerned about keeping up with competitors and their pricing than with satisfying customers with value. Co-creating value helps to understand the constantly shifting perspective of customers.
When defining ‘value’ the customer’s input is important. However there are also external factors to be considered, especially in the constant and rapidly changing world. If there is an open dialogue between the service provider and the stakeholders, they can include these external factors in their discussion and try to create value for anyone involved. Even if that means constantly revisiting what is valuable.
How to co-create
When the latest version of ITIL, ITIL 4, was launched it was made sure a lot of agile and DevOps oriented approaches were included. This enables ITIL 4 practitioners to ensure that all stakeholders are involved in planning, designing, building, supporting and improving services. This makes sure that value is being co-created and value can be achieved for the customer, service consumers and the organisation itself.
Successful co-creation of services need a clear understanding of the fact that all stakeholders have a role to play. All stakeholders need to be heard and listened to. All stakeholders need to share information of needs and constraints that may impact the final service. In order to have this open discussion, relationships need to be strong and resilient with confidence and trust from all parties involved.
Some things that can certainly provide support for the co-creation process and help sustain its success include;
- Co-creation needs an agile and flexible mindset
- Co-creation needs a positive approach, constant disagreement does not help the process
- Co-creation comes with ups and downs and needs full engagement from all parties
- Co-creation is successful when all inputs from all parties are heard, letting go of control is key
- Co-creation means not strictly following the process but flowing with the tides of the stakeholders included
Source Axelos; ITIL 4 and value co-creation