Service organizations - ITIL Tutorial

- In today's digital economy every organization in the world has become a service organization. You may think your organization isn't a service organization but when you really look at what it does on a daily basis, it's truly is a service organization. For example, you may work for a grocery store and you may think you're in the business of selling milk and cereal, which are both products but in reality, you're probably really a service organization too. Most of the services if not all of the services that your company currently owns and manages is done to co-create value with your customers and these are enabled by information technology. Now, how can I make this claim? Well, let's consider the large retailer like Walmart who sells a wide variety of different products from diapers to groceries, to electronics and car tires. Walmart has been wildly successful in selling all of these different products, but the particular products Walmart sells doesn't really matter that much. Instead, the real reason that Walmart has been so successful is that they're able to provide a service to their customers that no one else has been able to do the way they have, and that is a collection of services that's enabled by IT. Walmart for example, has created a wonderfully robust distribution and logistics system to get their products to their stores quickly, efficiently, and more cost-effectively than other people and this allows them to rely on complex inventory tracking and logistics systems that are all run by various IT components and services. They've been able to do this, to provide products at their everyday low price, which is actually the service they provide to their customers. Walmart service is bringing you the products you want or need at the lowest price always. Other stores can't bring that to you at the same level or the same cost that Walmart can, so in a price battle, Walmart is going to win every time because of their ability to embrace IT to enable their services. But how is Walmart co-creating value with me, the customer? Well, let's say I was having a party tonight and I invited you over for dinner. I might run over to Walmart to buy all the supplies I need, things like meat and cheeses, vegetables, and drinks and I bring them all back to my kitchen. I then use all of those ingredients to cook a meal for my party tonight. The value isn't, the ingredients that I got from Walmart, it's the outcome that I had when I co-created value with Walmart. Walmart provided all the ingredients at a low price and I provided the ability to cook it all up into a delicious meal. Now, the value is the happiness and the full bellies of all of my guests at my party. This is the value co-created through the service. Now, as you think about all the different industries and organizations in the world, it's really hard to think of any that aren't providing some kind of service that is enabled by technology. Because of this, technology has become commonplace in the modern workplace, but all of this technology needs to be managed in order for it to be effective at enabling value to your customers by providing services, and this brings us to the concept of service management. Service management is defined as a set of specialized organizational capabilities for enabling value to customers in the form of services. The purpose of ITIL 4 is to provide organizations working in this modern service economy with guidance for managing their information technology and information technology dependencies effectively, efficiently, and in some coordinated, structured and integrated way that combines the agility, the time to market, and their ability to deliver new things faster while using their risk controls and providing assurance that the services will be performed properly today, tomorrow, and any day further off into the future. Notice this isn't just about providing a service fast to a customer, but it's also about being able to balance that with the proper controls so that that is providing a quality service now and into the future. This ensures that there's a balance of speed and control within our organizations and their services. Simply put, ITIL 4 provides organizations with a comprehensive framework for IT service management. This framework is designed to ensure that an effective, efficient, flexible, coordinated and integrated system for the governance and management of services is established. It also is concerned with ensuring that these services are continually improving within your organization. Now, if you're new to the business world or information technology, the world governance might be one that you're not quite familiar with. Governance is simply the means by which an organization is directed and controlled. This means that it involves all of the processes needed to govern or oversee the running of the organization. For example, in the United States our government creates rules and laws that are used as a method to direct the actions of its citizens. This is called governance, right? It's the way that we operate a country. Well, organizations need governance too. And at your company there's a process probably for everything you need to do. Think about it if you wanted to take two weeks of vacation, you couldn't simply decide just to not go to work for two weeks without telling your boss, right? You'd probably end up losing your job. Now instead, you're going to go through the process to request the vacation and that process is going to be different based on your organization or my organization, because each organization runs itself and its processes differently, that way that they run things that's known as governance.