The ITIL Value System

The value system as a model

Any organization receives a steady flow of possibilities and requests. Some are ideas it could pursue; others are needs that consumers bring to it. The ITIL Value System (ITIL VS) is a model of how all the parts of an organization work together to turn that flow into value through digital products and services. It is not a process you follow step by step; it is a map that shows which parts must be in place and how they relate.

The model has two inputs:

• Opportunity: a chance to add value for stakeholders or otherwise improve the organization, often one that no consumer has asked for yet. For Kestrel Energy, letting customers photograph their meter in the app instead of typing the numbers was an opportunity spotted by the app team.
• Demand: the need or wish of consumers, inside or outside the organization, for products and services. The billing department asking for automatic reminders for late payers is demand.

Both arrive constantly, and there is never enough capacity to do everything. Part of what the value system does is help the organization decide which opportunities and demands to pursue. The output of the system is value for the organization, its customers and other stakeholders.

The five components

The value chain is where the work happens. The practices provide the capabilities to do it, the principles shape how decisions are made, governance makes sure the work goes in the right direction, and continual improvement keeps all of it from going stale.

Why a system: avoiding silos

A silo is a part of an organization that works in isolation: it pursues its own goals, keeps its information to itself and hands work over the wall to the next team. Silos are rarely the result of bad intentions. They grow when each team is measured only on its own numbers.

A few years ago Kestrel had a textbook case:

• The service desk was measured on average call duration, so agents ended calls quickly and wrote short tickets.
• The network team in the NOC was measured on network uptime, and its dashboards were green while customers struggled.
• The app team was measured on features released per month, and shipped a login change without telling the service desk.

When customers could not log in to the app, each team could show it had met its own targets. The customers bounced between them for two days. Every team had optimized its piece, and the whole had become worse. Looking at the organization as one system — where value only appears at the end of the chain — makes such local optimization visible and gives teams a shared goal.

Governance

Governance is the way an organization is directed and controlled: who sets the goals and the rules, who may make which decisions, and how the results are checked. In ITIL (Version 5) the focus is on the governance of digital technology — how the organization decides about its current and future use of it. Governance is usually described with three activities:

• Evaluate the situation, the strategy, the options and the risks.
• Direct: set priorities, policies and responsibilities, and assign the means.
• Monitor whether performance and conduct match the direction, and correct course when they do not.

Governance is often seen as a brake: approvals, audits, forms. Good governance is the opposite. By making clear what is allowed, who decides and which risks are acceptable, it lets teams act without asking permission for every step. Kestrel's board decided that changes to customer-facing systems below a defined risk level need no meeting at all; that single governance decision did more for delivery speed than any tool. For the governance of information security specifically, see Governance, Frameworks and Compliance.

Management practices

A management practice is a set of organizational capabilities (ITIL 4 said "resources") designed to do a particular kind of work or reach a particular goal. Capabilities here means more than a procedure: the people and skills, the information, the tools, the partners and the workflows together. Incident management, for example, needs trained staff, a ticketing tool, knowledge articles, agreements with suppliers and a way of working.

A practice is not a department. At Kestrel, incident management is done by the service desk, the NOC, the app team and the cloud provider together; no team is called "incident management". Thinking in practices helps you see that the whole chain must work, not just one team.

ITIL (Version 5) describes 34 management practices, divided into two groups: general management practices, which any organization needs, and product and service management practices, which are specific to creating and running digital products and services. As described in training material, the practices are grouped like this:

Each practice is described in detail in an ITIL Practice Guide, available to PeopleCert Plus members. In the editions published so far (based on the ITIL 4 Practice Guides), a guide typically explains the practice's purpose and key terms, its success factors and metrics, how it contributes to value streams, and the roles, information, tools and partners it relies on. The guides are a reference for practitioners: you open the one you need when you are designing or improving that practice, rather than reading all 34. The everyday practices are explained in this topic from The Service Desk onward.

Purpose, strategy and operating model

Every organization exists for a reason. Its purpose answers "why are we here?" — for Kestrel, helping households use energy affordably and with less impact on the climate. Its vision describes the future it wants to reach ("by 2030, every customer can manage their energy entirely online"), and its mission describes what it does now, for whom ("supply reliable, fairly priced energy and make every contact simple"). A strategy is the plan for getting from where the organization is to that vision; a digital strategy does the same for the use of digital technology.

The operating model describes how the organization actually arranges its people, processes, information, technology and partners to carry out that purpose and strategy. Kestrel's operating model includes product teams that build and run the app and portal, a central service desk, a NOC staffed around the clock, workloads split between a cloud provider and colocation, and a telecom carrier for its network links. The value chain and the practices are the means through which the operating model does its work; when the strategy changes, the operating model usually has to change too.

VUCA

Strategies are made in a world that does not sit still. VUCA stands for volatility, uncertainty, complexity and ambiguity: a description of environments where conditions change fast, the future is hard to predict, many factors influence each other and information can be read in several ways. Kestrel knows all four: volatile energy prices, uncertain regulation, a complex chain of systems and suppliers, and ambiguous signals about what customers will want. The practical lesson is to plan in shorter cycles, keep options open and check results often, rather than to fix a five-year plan and hope.

Transformation and business as usual

Business as usual (BAU) is the normal, day-to-day running of the organization: answering calls, running the billing cycle, patching servers, handling requests. A transformation is a fundamental, deliberate change in how the organization works, which reaches across many teams and usually takes years — for Kestrel, moving billing to a new cloud platform while replacing phone support with digital self-service.

The two compete for the same people. The engineers who should design the new platform are also the ones who get called when the old one fails. Organizations that ignore BAU during a transformation see service quality drop; organizations that let BAU always win never transform. Good governance makes this trade-off explicit: how much capacity goes to running, how much to changing, and who decides when they clash.