ITIL 4 Guiding Principles – Focus on VALUE!

Adopting the ITIL seven “Guiding Principles” for service providers could be the best way to establish a healthy organizational culture. All “Guiding Principles” are powerful but today are some thoughts on just one and that is “FOCUS ON VALUE”.

ITIL 4 best practice guidance says to focus on value. Getting level set on what VALUE is for your business partners, customers and consumers is critical to every strategic, tactical, and operational action! To understand this better let’s start with the official definition of a service. “A service is a means of enabling value co-creation by facilitating OUTCOMES that customers want to achieve without the customer having to manage specific costs and risks". If this is so, then there is a direct correlation between VALUE and OUTCOMES. When it comes to defining “VALUE” we must get OUT of “IT”.

An “OUTCOME” is what we deliver. It is not the activities within the value delivery stream but rather the RESULTS of all people, processes, activities, and technology that is used. Every initiative/action has a value-add element to it but in and of itself does not deliver VALUE. In order to deliver value, it is not only necessary to identify the requirements for a new or changed service but also to identify and agree on what the expected OUTCOMES should be. These identified and quantified outcomes will become the cornerstone for your metrics and measurements. All too often we look at internal metrics to measure value and truly this does not work.

Example:

A techy at a large insurance company asks; “How many servers should we be able to spin up per hour in order to have a good DevOps continuous delivery pipeline?”

Developer says, "We doubled our cycle time from Q1 to Q2!"

This is a very large insurance company so one of their business partners is “Claims Processing”. Now, put yourself in that seat. Do either of these internal siloed measurements resonate with the person who is processing claims? The answer? “No”!

In order to get to real OUTCOMES, that deliver VALUE we must get out of “IT”. The measurements in the first example may or may not RESULT in VALUE! How do we know what VALUE is? Quantify the OUTCOMES from the customer's perspective! Therefore; a better example to identify and quantify outcomes here might be:

How many claims does the Claims Processing Department need to process per hour?

When two hurricanes hit the United States few insurance organizations were able to manage the volume of requests for processing claims in a timely way for their consumers. This example is a quantified customer OUTCOME that is sure to deliver VALUE for the service provider, the business customer, and the external consumer! Once OUTCOMES are identified the service provider can then determine what the low-level metrics and measurements in the value stream should be to meet that “QUANTIFIED OUTCOME”.

Promoting a “Focus On Value” culture is an effective way of breaking down organizational siloes. Every person in your organization should have a clear understanding of their contribution towards creating value for the organization, its customers, and other stakeholders.

Educate & Inspire…

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