Value for Stakeholders, PESTLE and the Four Dimensions
Welcome back! This post is the second in a series in which I connect key concepts of ITIL 4.
In the last article, we briefly discussed the concept of value co-creation, and I’d like to expand on that here.
While value is generated through interactions between service provider and customer, that value may also be shared (or apportioned out) with multiple stakeholders. Some of these stakeholders may even be external to the service provider.
Let’s take the mobile banking app I’d mentioned in my first post. While value is (visibly) generated when the customer uses the app to pay bills, behind the scenes value is also generated for auditors and tax authorities through the records created through the transaction. Additional value may be generated through the interaction between the bank and an external supplier of services, for example a payments processer.
So a single transaction must generate value for the customer – but it must also generate enough additional value to meet the needs of other relevant stakeholders who might not actively participate in the transaction. Failure to consider these multiple needs can lead to unwanted consequences (suppliers refusing to renew contracts, tax authorities imposing fines, and so on).
These stakeholders in turn influence or constrain the service organisation in a myriad of ways. In ITIL 4, we looked at a common business analysis tool to help describe these influences – the PESTLE model:
Let me step away briefly and describe another concept in ITIL 4 – The Four Dimensions of Service Management. At its heart, the Four Dimensions represent an evolution of the “4Ps of Service Design” and can be traced back to the service assets model in ITIL v3. The Four Dimensions are:
- Organizations and People
- Value Streams and Processes
- Information and Technology
- Partners and Suppliers
The Four Dimensions interact and combine to create the products and service offerings that the service organization provides to its customers (see blog post 1). To put it another way, a service organization must take into account these Four Dimensions when planning, designing, developing, and operating its products and services. Failure to adequately manage any of these dimensions, or the interactions between these dimensions, can lead to failure to co-create sufficient value for all stakeholders.
I believe the Four Dimensions also provide a lens through which to design and operate IT service management as well. In other words, when creating an Incident Management Practice (more on practices in later post), an ITSM professional must take into account the organization and its people (management structure, culture, etc.), the value streams and processes the organization needs to follow, the information assets and tools needed, as well as the support of partners and suppliers.
The PESTLE model therefore describes external influences (or constraints) that impact the management of products and services, or the management of IT service management capabilities. For example, the introduction of GDPR has impacted the way an organization manages its work, its information assets, and even the work of its partners and suppliers. And the same regulation has impacted the way an organization collects and processes information needed to execute its service management capabilities.
Generically speaking, the Four Dimensions model influences the system in which organizations convert customer demand into value for multiple stakeholders – something that ITIL 4 refers to as the Service Value System. That’s what we’re going to look into in part 3.
ITIL 4: Connecting key concepts video Part 2
The ITIL 4 framework, the latest evolution of ITIL, introduces new key concepts that enables you and your organization to deliver world-class IT-enabled products and services.
Visit our ITIL 4 Concepts page to read and watch the next in our blog and video series ‘ITIL 4: Connecting key concepts’.
Watch our animation ITIL 4: Connecting key concepts to discover how these key concepts of ITIL 4 come together to create a flexible and effective service management architecture.
Read other blog posts in this series
ITIL 4: Connecting key concepts – Part 1
ITIL 4: Connecting key concepts – Part 3
ITIL 4: Connecting key concepts – Part 4