ITIL 4 and value co-creation

Team of ITSM practitioners in meeting room defining value co-creation strategy as one takes notes using flip chart

Why is co-creating value within service management such an important concept in ITIL® 4?

While some customers might expect providers to “deliver value” independently, value requires open dialogue and active collaboration between providers and consumers. Everyone needs to agree on what value is to satisfy the genuine requirements of the customer and ensure a consistent and adaptable approach, which will allow you to “co-create” value with the customer.

Previously, providers could create services and deliver value, though organizations that only consider their own perspective can risk falling behind their competitors. Instead, they need to understand the constantly shifting perspective of their customers.

Today’s rapidly changing world demands awareness of both present and future needs. This is how a company like Uber has succeeded by giving people what they want: an on-demand, door-to-door service, while consistently responding to customer feedback and eclipsing traditional taxi businesses in the process.

Complex service relationships and value co-creation

Close-knit relationships between everyone involved in service management is necessary for value co-creation, to ensure services keep up with customer needs.

This means going beyond service level agreements: in value co-creation, the service provider and consumer have a two-way communication process to generate feedback and pre-empt demands in a proactive rather than reactive way.

Through robust communication, an organization cultivates closer relationships and helps to resolve issues through one-on-one discussions. This service-oriented perspective can be used as a value driver and is a growing phenomenon, exemplified through small banks selling close, personal customer relationships to create demand.

Assuring the customer that you understand them, are there to help and don’t see them as simply a financial transaction is what value co-creation is about. Ultimately, only the consumer decides whether the service is creating value.

Value co-creation in ITIL 4

Taking an Agile and DevOps oriented approach enables ITIL 4 practitioners to ensure customers are involved in planning, designing, building, supporting and improving services through robust feedback mechanisms. This ensures value is being co-created and can be achieved for both the customer, the service consumers and the organization itself.

To support this approach we must consider the ITIL 4 guiding principle “Focus on Value”, which emphasizes understanding what generates the most value in a service, how to achieve that value and optimizing investments to maximize it for all parties. It speaks to the idea of open dialogue in developing products and services and recognizing value from the consumer’s perspective.

Is true value only ever co-created? 

True value is always co-created. It requires organizations to consider consumer, customer and provider perspectives to set appropriate expectations and understand requirements. This means continually revisiting what is valuable and to ensure a service responds to the constant shifts in the expectations and demands of stakeholders.

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