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ITIL 4 and IT4IT White Paper

White Paper

ITIL 4 and IT4IT White Paper

White Paper

  • White Paper
  • Agile
  • Behaviour
  • DevOps
  • Digital transformation
  • Value
  • ITIL

Author  Rob Akershoek

July 29, 2020 |

 19 min read

  • White Paper
  • Agile
  • Behaviour
  • DevOps
  • Digital transformation
  • Value
  • ITIL

IT’s current operating model is being challenged. The growth in complexity and the rate of change of IT has exposed limitations in current ways of working. In today’s environment, a digital management system that can holistically manage IT service and product lifecycles is integral to success. Organizations need an operating model that was designed specifically for the new digital reality.

This white paper explains how ITIL® 4 and the IT4IT standard can unite to manage the new digital reality. The combination of these two frameworks enables a more streamlined and automated delivery model: one which leverages Agile and DevOps methodologies.

There are several synergies between ITIL and the IT4IT standard. Both approaches are vendor agnostic and outcome centric: they focus on creating value. Also, they both consider the value chain holistically.

However, there are some key differences. For example, ITIL’s emphasis is on practices, culture, and behaviour, and IT4IT’s emphasis is on information flows and automating IT activities.

1.1 THE DIGITAL AGE AND DIGITAL TRANSFORMATION: WHY CHANGE IS IMPORTANT

Disruption from digital transformation challenges how IT is organized and managed. What’s more, technology is increasingly integrating into businesses and directly affecting the customer and business experience. IT is no longer a support technology, but an enabler of innovation. It enhances competitive advantage, boosts productivity, and reduces costs.

Four significant themes and challenges that are shaping future IT operating models are:

  • Digital business IT is a strategic asset that can enable new business models, boost customer satisfaction, and automate business processes. Organizations are transforming the way they engage with customers, employees, and other parties by creating a connected digital ecosystem. Budgets are shifting from IT departments to other departments, so IT managers have less control over how technology is selected, implemented, and managed. IT departments must collaborate to co-create digital offerings that optimize value streams and customer journeys.
  • Technology ecosystem New technologies provide opportunities and risks. These include migrating legacy applications to the cloud and leveraging opportunities such as big data, artificial intelligence, and the Internet of Things. New technologies must be managed efficiently and effectively.
  • Increasing demand IT must deliver faster and improve product quality while reducing costs and risks and complying with regulations.
  • Transform IT delivery New delivery paradigms, such as DevOps, Agile, and CI/CD, are emerging. A key theme is automating activities, including building, testing, deployment, and monitoring activities. New deployment methods, such as infrastructure as code, are adopted across multiple vendors in the ecosystem.

These themes are illustrated in Figure 1.1.

Figure 1.1 Key forces affecting the IT operating model
Figure 1.1 Key forces affecting the IT operating model

1.1.1 Why today’s IT will not work tomorrow

Often, organizations do not plan or design future operating models and value streams because they are busy with day-to-day operations. Instead, fragmented initiatives improve siloed IT management capabilities. These initiatives typically include:
  • transitioning from waterfall to Agile delivery, such as by creating an Agile backlog
  • creating DevOps teams that are organized around products
  • implementing an integrated CI/CD pipeline (automating build, test, and deployment)
  • improving test automation
  • improving self-service and self-help capabilities
  • improving collaboration and communication between stakeholders
  • continually monitoring compliance
  • monitoring security and event management
  • improving software asset/license management
  • upgrading or migrating current IT management tools
  • implementing log monitoring and analytics
  • monitoring services from a business/end-user perspective, such as application performance monitoring
  • improving the data quality of the configuration management database, such as by using discovery and automated inventories
  • improving cost transparency and allocating costs based on actual consumption
  • managing cloud environments, such as SAAS, PAAS, and IAAS.

These initiatives will not deliver the expected benefits if they are not well planned. To succeed in an increasingly complex and connected digital ecosystem, organizations need a different approach, as is illustrated in Figure 1.2.

Figure 1.2 The IT ecosystem’s increasing demand and complexity
Figure 1.2 The IT ecosystem’s increasing demand and complexity

Most IT organizations are not equipped to handle these increasing demands. Without a more effective digital management model for IT, organizations will not be able to respond to opportunities or threats quickly, resulting in higher costs, longer lead times, and lost revenue.

Organizations need to adopt a new operating model: one where IT is integrated, streamlined, and automated.

What are ITIL 4 and the IT4IT standard?

2.1 ITIL 4

ITIL is the most widely used IT service management framework in the world. ITIL 4 embraces new ways of working, including Agile, DevOps, and continuous integration/continuous deployment (CI/CD) and retains the best and most effective elements of previous evolutions of ITIL. It uses a value stream approach to model activities that co-create value and helps organizations to address modern service management challenges. It is designed to ensure a flexible, coordinated, and integrated system for the governance and management of IT-enabled services.

The key components of ITIL 4 are the service value system (SVS), shown in Figure 2.1; the four dimensions of service management, shown in Figure 2.2; and the service value chain, shown in Figure 2.3.

The SVS represents how the various components and activities of the organization work together to facilitate value creation through IT-enabled services.

To ensure a holistic approach to service management, ITIL outlines four dimensions of service management. These are:

  • Organizations and people An organization needs a culture that supports its objectives, as well as the right level of capacity and competency among its workforce.
  • Information and technology In the context of a value chain, this includes the information, knowledge, and technologies required for the management of services.
  • Partners and suppliers This refers to an organization’s relationships with other organizations that are involved in the design, deployment, delivery, support, and continual improvement of services.
  • Value streams and processes How the various parts of the organization work together to enable value creation through products and services.

All four dimensions must be considered so that the service value chain remains balanced and effective. The service value chain models a generic end-to-end value chain from demand to value. The service value chain’s flexibility allows organizations to effectively and efficiently react to changes in demand.

Figure 2.1 The service value system
Figure 2.1 The service value system

Figure 2.2 The four dimensions of service management
Figure 2.2 The four dimensions of service management

Figure 2.3 The service value chain
Figure 2.3 The service value chain

The value chain activities are enabled by management practices. There are 34 practices in ITIL, listed in Table 2.1.

General management practicesService management practicesTechnical management practices
Architecture managementAvailability managementDeployment management
Continual improvementBusiness analysisInfrastructure and platform management
Information security managementCapacity and performance managementSoftware development and management
Knowledge managementChange enablement
Measurement and reportingIncident management
Organizational change managementIT asset management
Portfolio managementMonitoring and event management
Project managementProblem management
Relationship managementRelease management
Risk managementService catalogue management
Service financial managementService configuration management
Strategy managementService continuity management
Supplier managementService design
Workforce and talent managementService Desk
Service level management
Service request management
Service validation and testing

2.2 THE IT4IT STANDARD

The IT4IT standard is a reference architecture for managing a digital enterprise. It uses a value chain approach to model the IT functions and identify activities that contribute to business competitiveness. Its objectives include:

  • providing the capabilities for managing IT, thereby enabling better, faster, cheaper, and less risky ways of working across the entire value chain
  • providing guidance on integrating and automating IT Value Chains with a common service model backbone
  • defining a common information model for IT management
  • supporting real-world use-cases driven by the digital economy, such as cloud sourcing, Agile, DevOps, and service brokering
  • embracing existing process frameworks and methodologies, such as ITIL, COBIT, SAFe, SCRUM, and TOGAF®, by focusing on data during implementation: essentially specifying an information model across the entire value chain
  • being industry-independent and able to solve the same problems for every organization
  • being applicable in existing organizations and accommodating future IT paradigms.

ITIL and the IT4IT standard have a comparable focus on value chains. Where ITIL refers to the service value chain, the IT4IT standard uses the IT Value Chain.

IT4IT definition: IT Value Chain
The operating model for the IT business function. It includes primary activities, which are concerned with the production or delivery of products or services, and supporting activities, which make the primary activities more efficient and effective.

The operating model for the IT business function. It includes primary activities, which are concerned with the production or delivery of products or services, and supporting activities, which make the primary activities more efficient and effective.

The IT4IT Value Chain is shown in Figure 2.4.

Figure 2.4 The IT Value Chain
Figure 2.4 The IT Value Chain

2.2.1 The four value streams

ITIL and IT4IT use slightly different definitions of ‘value stream’.

ITIL definition: Value stream
A series of steps that an organization uses to create and deliver products and services to a service consumer. Value streams involve multiple value chain activities and are supported by multiple practices.

Examples of value streams described in ITIL include:

  • processing a demand for a new or current service or product
  • processing a service request from a user
  • resolving an incident
  • analysing and addressing feedback
  • updating products due to technology lifecycle management events, such as end of life/support.

IT4IT definition: Value stream
A description of the key activities for a discrete area within the IT Value Chain where some unit of net value is created or added to the service as it progresses through its lifecycle. Each value stream encapsulates capabilities that are necessary to manage aspects of the service/product lifecycle.

The IT Value Chain has four value streams that outline how value can be added at every stage of the product or service lifecycle. They are:

  • Strategy to portfolio Define your strategy to balance and broker your portfolio.
  • Requirement to deploy Prioritize every requirement to build the best services and deploy them.
  • Request to fulfil Handle each request by streamlining the process to fulfil it.
  • Detect to correct Seek to detect issues and correct them before they impact the user.

Each value stream is centred on a key aspect of the service model backbone. The functional components define which building blocks or capabilities are needed to automate and enable service management activities.

IT4IT definitions: Service model backbone
A central element in the IT4IT standard consisting of the key data objects that define the products and services, including blueprints, service catalogues, service offerings, and live products and services.

Functional component
A logical system that needs to be present in any IT organization to provide specific management capabilities to support IT staff who are performing IT management activities. Functional components manage specific IT management data and have defined inputs and outputs that are data objects.

The four value streams, shown in Figure 2.5, are vital for helping the IT function control the service model as it advances through its lifecycle. Figure 2.6 shows how the four value streams interconnect.

Figure 2.5 IT4IT value streams
Figure 2.5 IT4IT value streams

2.2.1.1 Strategy to portfolio

This value stream provides IT organizations with the optimal framework for connecting the functions involved in managing the portfolio of services. Its activities include capturing demand for IT services, prioritiz- ing and forecasting investments, and managing portfolios and projects. These activities require consistent and transparent data in order to maintain alignment between the business strategy and the IT portfolio.

2.2.1.2 Requirement to deploy

This value stream is about orchestrating changes to the services. It covers planning, designing, coding, integrating, and testing new releases. This value stream typically includes managing the Agile backlog, source code, CI/CD pipeline, and tests.

2.2.1.3 Request to fulfil

This value stream is about fulfilling standard and repeatable requests from a standard catalogue, such as a web shop, or directly consuming services through an application programming interface.

2.2.1.4 Detect to correct

This value stream is about ensuring continuous operations by monitoring services and proactively resolving issues before the customer is affected.

Figure 2.6 highlights the IT4IT standard’s focus on the entire IT Value Chain, and it contains the most important functional components within the IT function. Implementing the IT4IT standard requires a careful selection of IT management tools that support the identified interfaces and enable end-to-end workflows across the value streams.

Figure 2.7 highlights key data objects organized around the service model backbone. They store data about every service across its lifecycle and create and maintain the traceability of key information and decision-making across the entire value chain. Consistent links between the data allow organizations to control the costs, risks, and value associated with service management.

A value stream is triggered by demand and ends in value; the value stream’s goal is to convert demand into value. These fundamental rules are suggested by both ITIL and IT4IT. Despite the differences in terminology, the two models can be effectively used together.

Figure 2.6 The IT4IT reference architecture, level 1
Figure 2.6 The IT4IT reference architecture, level 1 (Click for larger image)

Figure 2.7 Data links that enable transparency and traceability
Figure 2.7 Data links that enable transparency and traceability (Click for larger image)

A unified model for managing IT: Mapping ITIL 4 and IT4IT

ITIL 4 and IT4IT are complementary. They can be used to create an operating model that will centralize IT in digital organizations. This operating model would cover the IT management capabilities and building blocks needed to manage the end-to-end lifecycles of digital services.

Figure 3.1 is an overview of how ITIL and IT4IT can be used to build an integrated IT operating model. ITIL recommends work practices and ways of working, and IT4IT provides the information flows and systems needed to automate end to-end workflows, enable flow, and provide transparency and traceability.

Figure 3.1 Combining ITIL and IT4IT to build an IT operating model
Figure 3.1 Combining ITIL and IT4IT to build an IT operating model

3.1 ITIL VALUE CHAIN ACTIVITIES AND IT4IT VALUE STREAMS

IT4IT’s value streams can be mapped to the ITIL value chain activities, as shown in Figure 3.2.

Figure 3.2 ITIL value chain activities and IT4IT value streams.
Figure 3.2 ITIL value chain activities and IT4IT value streams (Click for a larger image).

The engage value chain activity, for example, includes all interactions with stakeholders. The IT4IT standard defines four value streams, each of which has several key interactions with stakeholders and users, as outlined in Table 3.1.

IT4IT value streamEngage value Chain activityExample data objectives
Strategy to portfolioCollaboration with stakeholders about demand and opportunities

Collaboration with vendors about technology roadmaps and new opportunities
Business demands

New ideas/improvement opportunities

Feedback from the organization, such as service reviews
Requirement to deployCollaboration with vendors, stakeholders, and users about new or modified requirements and featuresNew feature requests/ requirements

Feedback from key users
Request to fulfilCollaboration with consumers about service requests from the standard service catalogue

Brokering services across multiple vendors
Service requests, such as requests to access an application or cloud resources
Detect to correctCollaboration with consumers to report incidents, raise questions, provide feedback, and so onIncidents

Questions

Complaints

Feedback

Table 3.1 IT4IT value stream interactions with the engage value chain activity

3.2 ITIL PRACTICES AND IT4IT VALUE STREAMS

The 34 ITIL management practices enable the four IT4IT value streams and can be plotted against them, as shown in Figure 3.3.

Figure 3.3 Visualization of the primary mapping of ITIL practices to the IT4IT value streams
Figure 3.3 Visualization of the primary mapping of ITIL practices to the IT4IT value streams (Click for larger image)

Table 3.2 maps the IT4IT value streams and their functional components to the ITIL practices.

IT4IT value streamIT4IT functional componentPrimary ITIL 4 practices
enabling this value stream
Other ITIL 4 practices
supporting this value stream
Strategy to portfolioEnterprise architecture

Policy

Proposal

Portfolio demand

IT investment portfolio

Service portfolio
Strategy management

Architecture management

Portfolio management

Relationship management
Continual improvement

Risk management

Service financial management

Information security management

Supplier management
Requirement to deployProject

Requirement

Service design

Source control

Build

Build package

Release composition

Test

Defect
Project management

Business analysis

Service design

Software development and management

Service validation and testing

Release management

Deployment management
Architecture management

Availability management

Capacity and performance management

Risk management

Service continuity management

Information security management

Infrastructure and platform management
Request to fulfilEngagement experience portal

Offer consumption

Offer management

Catalogue composition

Request rationalization

Fulfilment execution

Usage

Chargeback/showback

Knowledge and collaboration
Service catalogue management

Service request management

Infrastructure and platform management

Knowledge management
Capacity and performance management

Information security management

IT asset management

Service configuration management

Service financial management
Detect to correctService monitoring

Event

Incident

Problem

Change control

Configuration management

Asset

Diagnostics and remediation

Service level
Service desk

Service level management

Monitoring and event management

Incident management

Problem management

Change enablement

IT asset management

Service configuration management
Availability management

Capacity and performance management

Service continuity management

Information security management

Infrastructure and platform management
Supporting activitiesGovernance, risk and compliance

Sourcing and vendors

Intelligence and reporting

Finance and assets
  • Cost modelling
  • Investment
  • Asset

Resource management

-

Risk management

Supplier management

Measurement and reporting

Service financial management




Workforce and talent management

Organizational change management
Information security management

-


-


IT asset management




-

-

Developing an operating model using the ITIL continual improvement model

ITIL offers a universal model for continual improvement, shown in Figure 4.1, that can enable the development of an operating model based on ITIL and the IT4IT standard.

Figure 4.1 The ITIL continual improvement model
Figure 4.1 The ITIL continual improvement model (Click for a larger image)

Table 4.1 lists useful tools from ITIL and IT4IT that are relevant to each step of the continual improvement model.

Continual improvement model stepTools provided by ITILTools provided by IT4IT
What is the vision?SVS

Discourse on planning in ITIL 4 ®: Direct, Plan and Improve

Discourse on digital transfer in ITIL® 4:High- velocity IT
IT Value Chain

Value streams

Service model

The reference architecture model
Where are we now?Discourse on value stream mapping in ITIL® 4: Create, Deliver and Support and
ITIL® 4:Drive Stakeholder Value
Functional model

Functional components

The reference architecture model
Where do we want to be?Service value chain

Practice library
Value streams

Functional model

Functional components

The reference architecture model
How do we get there?Practice library

Value stream design recommendations in ITIL 4®: Create, Deliver and Support

Discourse on improvement in ITIL 4®: Direct, Plan and Improve
Functional model

Functional components

The reference architecture model
Take actionPractice guides

Discourse on digital tools in ITIL 4®: High-velocity IT
Functional model

Functional components

The reference architecture model
Did we get there?Evaluation recommendations in ITIL 4®: Direct, Plan and Improve

Example metrics in the Practice Guides
Example KPIs
How do we keep the momentum going?ITIL Guiding Principles

Conclusion

IT organizations are being challenged to manage digital ecosystems consisting of fast-changing hybrid environments and increasing numbers of services, components, and vendors. As a response to these challenges, organizations are working on many fragmented initiatives to improve and transform the IT function. These include introducing new ways of working (Agile, DevOps, CI/CD) and modernizing their IT-tooling landscape.

Typically, however, a blueprint of the target IT operating model that would connect and maximize all this progress is missing. Without this blueprint, most initiatives will fail. To be successful, an integrated approach that connects teams, processes, and tools, enables transparency, and optimizes end-to-end workflows is needed.

Digital journeys should begin with modern IT operating models. One can be created by combining ITIL 4 and the IT4IT standard into a holistic blueprint. This blueprint can help to diagnose the organization’s current state, find gaps, and create a transformation map to coordinate improvements.

About the author

Rob Akershoek is the Chair of the IT4IT Forum within The Open Group and IT Management Architect at Fruition Partners (a DXC company).

Rob Akershoek

Rob helps IT organizations to transform and implement new IT operating models to manage digital ecosystems. He combines multiple practices, such as ITIL, IT4IT, DevOps, and Agile. He assists IT organizations in their IT automation journey through the entire IT value chain, including portfolio management, the DevOps toolchain (including CI/CD, test management, monitoring and event management, and risk and security management) ITSM, CMDB, cloud orchestration, and so on. He also assists organizations in leveraging new IT management technologies, such as artificial intelligence ChatBots, Operational data analytics, and self-service portals.

Rob Akershoek is author of numerous articles and the IT4IT management guide (managing the business of IT).

Sources and further reading

Akershoek, R. (2016). The IT4IT Management Guide for managing the business of IT. Van Haren Publishing, Zaltbommel.

Akershoek, R. (2019). DevOps + ITSM: A Merge Request. Webinar. Accessible at: www.brighttalk.com/ webinar/devops-itsm-a-merge-request/ [Accessed 18 March 2020]

Akershoek, R. (2019). Is ITIL 4 DevOps Ready? Webinar. Accessible at: www.brighttalk.com/webinar/is-itil- 4-devops-ready/ [Accessed 18 March 2020]

Akershoek, R. (2019). ITIL 4 service value chain data flows (input and outputs). Online infographic. Accessible at: www.slideshare.net/robakershoek/itil-4-service-value-chain-data-flows-input-and- outputs-135507433 [Accessed 18 March 2020]

Anand, A. (2019). ITIL 4: Connecting Key Concepts – Part 1. AXELOS. Online. Available at: www.axelos. com/news/blogs/april-2019/itil-4-connecting-the-key-concepts-blog-part-1 [Accessed 18 March 2020]

AXELOS (2019) ITIL® Foundation: ITIL 4 Edition. TSO, London. AXELOS (2020)

ITIL® 4: Create, Deliver and Support. TSO, London. AXELOS (2020)

ITIL® 4: Direct, Plan and Improve. TSO, London AXELOS (2020)

ITIL® 4: Drive Stakeholder Value. TSO, London. AXELOS (2020)

ITIL® 4: High-velocity IT. TSO, London.

IT4IT™ Reference Architecture, Version 2.1, ©The Open Group. (2017) Online. Available at: https://pubs. opengroup.org/it4it/refarch21/ [Accessed 18 March 2020]

Lykov, A. Jouravlev, R. (2018). . AXELOS. Online. Accessible at: www.axelos.com/case-studies-and-white-papers/taking-it4it-on-the-itsm-journey [Accessed 18 March 2020]

The Open Group site: www.opengroup.org/IT4IT [Accessed 18 March 2020]