ITIL 4 Drive Stakeholder Value – When service marketing finally met ITIL

1. ITIL® 4
- ITIL 4 Drive Stakeholder Value – When service marketing
finally met ITIL
Christian F. Nissen, CFN Consult
ITIL®
is a Registered Trade Marks of AXELOS in the United Kingdom and other countries
© 2022 of CFN Consult unless otherwise stated

2. 2
Agenda
1. The rise of service science
2. ITIL 4 Drive Stakeholder Value
❍ The customer journey
❍ Explore
❍ Engage
❍ Offer
❍ Agree
❍ Onboard
❍ Co-create
❍ Realize
3. Discussion
Agenda
© 2022

3. 3
Service marketing – the Nordic school
❍ 1950-60s: Copenhagen School: Price is
not the only market parameter – quality,
service and advertising are other market
influencing parameters (The marketing
mix - the seven Ps: product, price, place,
promotion, people, physical evidence and process)
❍ 1970-90s: The Nordic School (Christian Grönroos, Evert
Gummesson, Richard Normann, Bo Edvaardsson).
❍ Service becomes a separate type of economic activity and
marketing research area in its own right (the services vs goods
paradigm). The service equivalent of a good is an interactive
process and its outcome. Perceived service quality: Functional
and technical quality.
❍ Business-to-business marketing becomes a focus area
(relationships, networks and interaction)
The
rise
of
service
science
© 2022

4. 4
Service marketing – the Nordic school
❍ Grönroos suggested that Service Management is a more
appropriate term than service marketing
❍ Focus on the outcome of a co-creation process in which
customers and other actors play a key role and value is
socially constructed
❍ From marketing mix to relationship management (e.g.,
customer relationship management)
❍ Introduction of the term ‘Moment of truth’, referring to the
customer-provider service encounter and interaction.
❍ Customer involvement in the service development process
and observations of customers in real action
❍ Internal marketing was introduced, among other as a
prerequisite for employees dealing with customers
❍ Estimate and measure customer satisfaction
The
rise
of
service
science
© 2022

5. 5
Service marketing – a paradigm shift
Two fundamental different views:
❍ E.g., services as part of the buying experience, added
services or after-services such as maintenance (goods vs
services)
❍ Goods and services are considered as two extremes of a
continuum (goods/services integration and
interdependency)
The
rise
of
service
science
© 2022
Goods
Goods Services
Services

6. Products, goods and services
6 © 2022
Goods Services
House Rented apartment / Airbnb Hotel apartments
Food Take-away / Instacart Restaurant
Car Leased car / DriveNow Train / bus / taxi / rented car
Boat Leased boat Ferry / rented boat
Music CD iTunes Music streaming
Book eBook e-Book streaming
DVD iTunes Movie streaming
Software, hardware Outsourcing ‘As-a-service’
Product
The
rise
of
service
science

7. Goods and services – characteristics
7 © 2022
Goods Services
Ownership Access
Added value Value co-creation (outcome)
Feature Utility / Warranty
Manufacture Co-create
Storable Inseparability (production and
consumption cannot be separated)
Maintenance Convenience
Risk transfer Risk share
The
rise
of
service
science

8. 8
Service-dominant (S-D) logic
❍ 2000s service-dominant logic (Stephen L. Vargo & Robert
F. Lusch): S-D logic argues that the demarcation between
goods and services that persisted throughout the 20th
century was artificial and has obscured that everyone
sells service
❍ Goods-dominant (G-D) logic sees services as somewhat
inferior to goods. G-D logic implies that principles
developed to manage goods production can be used to
manage services “production” and “delivery”.
❍ Service-dominant (S-D) logic sees service as the process
of doing something for and with another party. Value
creation, then, moves the provider, to a collaborative
process. In S-D logic, value is always co-created
The
rise
of
service
science
© 2022

9. 10
Service-dominant (S-D) logic premises
The
rise
of
service
science
© 2022
Foundational premise Explanation and comment
Service is the fundamental basis of
exchange.
The application of operant resources (knowledge and skills),
“service,” is the basis for all exchange. Service is exchanged for
service.
Indirect exchange masks the fundamental
basis of exchange.
Goods, money, and institutions masks the service-for-service
nature of exchange
Goods are a distribution mechanism for
service provision.
Goods (both durable and non-durable) derive their value through
use – the service they provide.
Operant resources are the fundamental
source of competitive advantage.
The comparative ability to cause desired change drives
competition.
All economies are service economies. Service (singular) is only now becoming more apparent with
increased specialization and outsourcing.
The customer is always a co-creator of
value.
Implies value creation is interactional.
The enterprise cannot deliver value, but
only offer value propositions.
Enterprises can offer their applied resources and create value
collaboratively (interactively) following acceptance but cannot
create/deliver value alone.
A service-centered view is inherently
customer oriented and relational
Service is customer-determined benefit and co-created; thus it is
inherently customer oriented and relational.
All social and economic actors are
resource integrators.
The context of value creation is networks of networks (resource
integrators).
Value is always uniquely and
phenomenologically determined by the
beneficiary
Value is idiosyncratic, experiential, contextual, and meaning-
laden.

10. 11
Service science
❍ 2010s service science (Jim Spohrer from IBM): An interdisciplinary
approach to the study and innovation of service systems
❍ Service is the application of resources to make changes that have
value for another. Service value is always co-created
❍ A service system is a complex dynamic configuration of interacting
resources with emergent properties. The properties and behavior
of a service system is more than the properties and behavior of the
individual resources.
❍ Resources are either operand (i.e., passive, such as financial,
physical, logical/technical, information) or operant (i.e., active, such
as practices, competencies, skills, knowledge, organizational
abilities, culture etc.)
❍ Service involves integration of resources between stakeholders
giving an active (operant) role to customers
The
rise
of
service
science
© 2022

11. 12
Service science
Service systems interact with other service systems to co-
create value through value propositions (i.e., sets of specific
benefits, favorable points or difference).
Value co-creation interactions are termed service interactions.
The
rise
of
service
science
© 2022
Service System
(Service consumer)
Service System
(Service provider)
Service
(Co-creation,
Interaction)
Resources
(Operand and
operant
resources)
Resources
(Operand and
operant
resources)
Service potential
(Service offer,
Service provision capability)
Service value
(Output and outcome)
Service potential
(Service consumption capability)

12. 13
Service science
Each service system engages in three main activities that
creates a service interaction:
1. Proposing a value co-creation interaction to another
service system
2. Agreeing to the proposal, and
3. Realizing the proposal
The
rise
of
service
science
© 2022

13. 14
The Taking Service Forward (TSF) initiative
❍ Founded by Stuart Rance (UK), Peter
Brooks (SA) and Christian F. Nissen (DK)
mid 2013
❍ In November 2013, thirteen volunteer service
management thought leaders met in
Birmingham for five days to establish the foundation for
an Adaptive Service Model (ASM)
❍ In February 2014 a crowd-kit was launched to enable the
community to contribute to the further development of the
Adaptive Service Model (ASM)
The
rise
of
service
science
© 2022

14. 15
From service science to the ASM
1. Proposing a value co-creation interaction to a stakeholder
❍ Relate
❍ Engage
❍ Offer
2. Agreeing to a proposal
❍ Agree
3. Realizing the proposal
❍ Interact
❍ Realize value (output and outcome)
© 2022
The
rise
of
service
science

15. 16
Adaptive service model (ASM)
The
rise
of
service
science
© 2022

16. 17
Adoptive service model (ASM) definitions
❍ SERVICE OFFER is a proposal from a service provider (service system)
to a service consumer (service system) for a potential future service
engagement
❍ SERVICE ENGAGEMENT (collaboration) is a formal or informal
specification of agreed expectations, rights, obligations and interfaces of
two or more service systems
❍ SERVICE ACT (the “moment of truth”) is an interaction that achieves
value co-creation between service systems
❍ SERVICE OUTCOME is the consequences for the stakeholders
involved in a specific service act between one or more service systems.
❍ SERVICE SYSTEM (provider, consumer, integrator etc.) is a dynamic
configuration of resources and intents whose purpose is to create value
with other service systems through co-creation
❍ SERVICE is one or more service acts between two or more service
systems creating service outcome
The
rise
of
service
science
© 2022

17. 18
Agenda
1. The rise of service science
2. ITIL 4 Drive Stakeholder Value
❍ The customer journey
❍ Explore
❍ Engage
❍ Offer
❍ Agree
❍ Onboard
❍ Co-create
❍ Realize
3. Discussion
Agenda
© 2022

18. From service science and ASM to ITIL 4
Service value is co-created between two or more interacting service
systems, in ITIL 4 called organizations:
19 © 2022
Organi-
zation
Organi-
zation
Value
co-creation
ITIL
4
Drive
Stakeholder
Value

19. Value co-creation through service interaction:
From service science and ASM to ITIL 4
20 © 2022
Organization, e.g., service consumer
Organization, e.g., service provider
Value
co-creation
Facilitate desired outcomes and experiences
Optimize resources and minimize cost
Optimize risk and compliance
ITIL
4
Drive
Stakeholder
Value
Band
of
visibility

20. 24
From service science and ASM to ITIL 4 DSV
ITIL
4
Drive
Stakeholder
Value
© 2022
Interact
Serve
Propose
Agree
Realize
Propose
Agree
Realize
Explore
Engage
Offer
Agree
Onboard
Co-create
Realize
Relate
Engage
Offer
Agree
Interact
Realize
Service science
(ISPAR)
Adaptive service
model (ASM)
ITIL 4 Drive
Stakeholder Value
Value co-creation through interaction:

21. 25
The customer journey
❍ The customer journey analogy can be applied on all types
of service stakeholder interactions, i.e., stakeholder
journeys
❍ A customer journey seldom follows a linear sequential
path, but dynamically evolves based on some basic
steppingstones
© 2022
ITIL
4
Drive
Stakeholder
Value

22. 27
Customer journey steppingstones
© 2022
ITIL
4
Drive
Stakeholder
Value

23. 28
Cynefin
© 2022
David Snowden, 2002, 2007, 2014, 2021
Confused_
Complex
Probe
Sense
Respond
Emergent practice
Complicated
Sense
Analyze
Respond
Good practice
Chaotic
Act
Sense
Respond
Novel practice
Clear
Sense
Categorize
Respond
Best practice
Complacency
“Where everyone know the
answer”
Relationship between
cause and effect is
obvious.
Predictability, routine,
established practice,
entrained thinking.
Encourage simplification.
“Where experts know the
answer”
Relationship between
cause and effect requires
investigation and analysis.
Unique, non-repeated,
multiple right answers,
experience/expertise.
Encourage analysis.
“Where there is no right
answer”
Relationship between
cause and effect is
impossible to determine.
Unpredictability,
turbulence, trial and error,
responsiveness.
Encourage action
“Where we know what was
right in retrospect”
Relationship between
cause and effect can only
be perceived in retrospect.
Unpredictability, flux,
emergence, creativity.
Encourage
experimentation
ITIL
4
Drive
Stakeholder
Value

24. 29
Cynefin: Customer journeys evolve differently
© 2022
Confused_
Complex
Probe
Sense
Respond
Emergent practice
Complicated
Sense
Analyze
Respond
Good practice
Chaotic
Act
Sense
Respond
Novel practice
Clear
Sense
Categorize
Respond
Best practice
Complacency
The journey follows a
complex pattern and emerges
dynamically. Next step on the
journey is determined through
‘trial and error’ (hypothesis
driven). Gain experience
The journey develops from prior
situations and transitions. The
next step on the journey is
determined through analysis.
Build journey capabilities
Customer journey follows a
well-defined and logical path.
Design the journey
?
? ?
?
?
?
?
David Snowden, 2002, 2007, 2014, 2021
ITIL
4
Drive
Stakeholder
Value

25. 30
Customer journey
© 2022
Determine
stakeholder
aspirations
Take the
customer
journey
Map the
customer
journey
(Re)design
the
customer
journey
Improve the
customer
journey
Outcome, experience,
risk, compliance,
resources, cost
Relate Engage Offer Agree Interact Realize
Steps
Understand
needs and value
of the other
party
Foster
relationships
Specify
requirements
and propose
value co-
creation
interactions
Align
expectations
and agree
outcome, utility,
warranty and
experience
Engage in
service
interaction
Track, assess
and evaluate
value
Touchpoints /
interactions
Service provider
teams / roles
BRM
Product owner
Service Desk
Developer
Experience
In
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ITIL
4
Drive
Stakeholder
Value

26. 31
Map the customer journey
© 2022
Relate Engage Offer Agree Interact Realize
Steps
Understand
needs and value
of the other
party
Foster
relationships
Specify
requirements
and propose
value co-
creation
interactions
Align
expectations
and agree
outcome, utility,
warranty and
experience
Engage in
service
interaction
Track, assess
and evaluate
value
Touchpoints /
interactions
Service provider
teams / roles
BRM
Product owner
Service Desk
Developer
Experience
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ITIL
4
Drive
Stakeholder
Value

27. 33
Customer journey – explore
Explore the need for service, including:
❍ organizational purpose, i.e., the ‘big why?’
❍ organizational capabilities (value streams and processes,
organization and people, information and technology, partners
and suppliers)
❍ operational context including political, economic, sociological,
technological, legal, and environmental factors (PESTLE)
❍ strategic strengths, weaknesses, opportunities and threats
(SWOT)
❍ risks and mitigation
Understand service providers and their offers
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Understanding service consumers and their needs
Understanding service providers and their offers
Understanding markets
Targeting markets

28. 34
Customer journey – engage
❍ The parties must have a shared understanding of
expectations, not only in terms of outcomes but also
experience and preferences.
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Communicating and collaborating
Understanding service relationship types
Building service relationships
Managing suppliers and partners

29. 35
Customer journey – engage
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Communicating and collaborating
Understanding service relationship types
Building service relationships
Managing suppliers and partners
Basic relationship Collaborative relationship Partnership
Relationship
maturity
Ad-hoc, order taker
Reactive service without challenging
customer requests, lack of quality
data
Service provider, (trusted) advisor.
Both understand capabilities and
needs. Mutual decision making,
increasing sense of value
Strategic partner
Common goals with focus on value.
Clear accountability for achieving
value, quality data for understanding
value
Approach for
building
relationship
Minimize information sharing. Set up
a single channel of communication.
Proactively seek to add value. Invest
in relationship management
Shared goals for maximizing value.
Shared risk and reward. Jointly invest
in streamlining shared processes.
Key attributes Formal procedures and controls.
Minimal information sharing
Price driven, easy to exit
Single point of contact
Extensive communication, but limited
information sharing. Aligned
outcomes, feedback and semi-formal
controls. Many points of contact.
Deep trust and partnership.
Acknowledge mutual importance.
Free exchange of information. Hard to
exit.
dependencies are shown in Table 4.3.
Basic relationship Cooperative relationship Partnership
Key attributes
Frequent misperceptions build
distrust
and does not challenge customer
requests
There is a lack of quality data to
Frequent misperceptions may
There is a mutual understanding
and appreciation of demand and
supply
and often in the customer decision
understanding of product and
Strategic partner
consumer share common goals
There is clear accountability for
analysis
rewards
Organization A
Offer Prov
i
d
e
O
b
t
a
i
n
a
n
d
configure
Organization B
Offer Prov
i
d
e
O
b
t
a
i
n
a
n
d
configure
Offer Prov
i
d
e
O
b
t
a
i
n
a
n
d
configure
Organization B
Offer Prov
i
d
e
O
b
t
a
i
n
a
n
d
configure
Organization A Organizations
A and B
Offer Prov
i
d
e
O
b
t
a
i
n
a
n
d
configure
Service relationship types

30. 36
Customer journey – engage
❍ Create environments
that allow relational
patterns to emerge
(service mindset,
awareness,
channels,
expectations etc.).
❍ Relationships can be
nurtured – not
controlled.
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Communicating and collaborating
Understanding service relationship types
Building service relationships
Managing suppliers and partners
The service relationship ladder

31. 37
Customer journey – offer
❍ Understand why a service is needed,
customer needs and wants and the
expected outcome.
❍ Analyze patterns of business activity
and define user profiles (persona)
❍ Specify customer requirements
❍ separate the problem from the solution
❍ consider a minimum viable product
❍ break down into features/enablers and
user stories
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Managing demand and opportunities
Specifying and managing customer requirements
Designing service offerings and user experience
Selling and obtaining service offerings
Epic Epic
Enabler Feature Feature Feature
Time
Story Story
Story
Story Story
Story Story
Story Story Story
Sprint 1
MVP
Sprint 2
Sprint 3
Backlog
Priorities

32. 38
Customer journey – offer
❍ Design service offerings and user experience
❍ agile development – continuous value co-creation
❍ service design thinking
❍ service blueprinting
❍ design for easy onboarding
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Managing demand and opportunities
Specifying and managing customer requirements
Designing service offerings and user experience
Selling and obtaining service offerings
Design thinking – user centric services

33. 39
Customer journey – agree
❍ Align expectations
❍ Map and plan value co-creation
❍ Agree service scope and quality
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Agreeing and planning value
Negotiating and agreeing service
Service value drivers

34. 40
Customer journey – agree
Agree expected service outcome, utility,
warranty and experience:
❍ obligation-based, typically by law or
other legislation
❍ agreement-based, typically in the form
of a service level agreement (SLA)
❍ promise-based, typically in the form of
intentions, promises, and impositions
– keeping promises builds trust
❍ based on social rules and
expectations, i.e. implied assumptions
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Agreeing and planning value
Negotiating and agreeing service
Agreed
service
level
From needs to agreement
Consumer needs &
expectations
Customer
requirements
Shared view on
service quality

35. 41
Customer journey – onboard
❍ Onboarding: A transition that involves the integration of the
resources (i.e., the four dimensions) of the service provider
and the service consumer.
❍ The main onboarding activities include
❍ fostering user relationships
❍ orchestrating omnichannel access
❍ enabling users for service, e.g., identification,
authentication, and authorization, user training, etc.
❍ elevating mutual capabilities, for example through training,
facilitation of user communities and super users.
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Planning onboarding
Relating with users and fostering relationships
Providing user engagement and delivery channels
Enabling users for services
Elevating mutual capabilities
Offboarding customers and users
Omnichannel
access

36. 42
Customer journey – co-create
❍ Each service act is a unique experience
❍ Service mindset: Five S’ for service:
❍ Smile, serve and support
❍ Seek first to understand – then to be understood
❍ Seize the “moment of truth”. Remember: Every incident
implies a moment of truth!
❍ Say sorry
❍ Save time for the unexpected.
“Time doesn't go, time comes” – In a good relationship, time
is an investment – not waste (“muda”).
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Fostering a service mindset
Ongoing service interactions
Nurturing user communities

37. 43
Customer journey – realize
❍ Service value is always co-created,
determined by and dependent on the
beneficiary
❍ Stakeholder value does not just
realize. Value must be driven, tracked,
assessed and evaluated for learning
and improvement
❍ value realization
❍ performance, output, and outcome
❍ experience and satisfaction
❍ service usage
© 2022
ITIL
4
Drive
Stakeholder
Value
Explore Engage Offer Agree Onboard
Co-
create
Realize
Realizing service value in different settings
Tracking value
Assessing and reporting value
Evaluating value realization and improving customer journeys
Realizing value for the service provider
Service value drivers

38. 44
Customer journey – summary
© 2022
ITIL
4
Drive
Stakeholder
Value

39. Questions and comments
45
Questions
and
comments
© 2022

40. 46
Agenda
1. The rise of service science
2. ITIL 4 Drive Stakeholder Value
❍ The customer journey
❍ Explore
❍ Engage
❍ Offer
❍ Agree
❍ Onboard
❍ Co-create
❍ Realize
3. Discussion
Agenda
© 2022

41. Discussion topics
❍ The agile movement seems to focus on product over
service (my postulate). Does the ITIL 4 DSV guidance
apply to product management? If so, which parts?
❍ ITIL claims that the service-dominant logic can be applied
on external as well as internal relationships. Is feasible to
consider internal colleagues as consumers? Pros? Cons?
❍ Historically, ITIL has provided guidance to the service
provider and not much guidance to the service consumer.
ITIL 4 DSV tries to provide guidance to both parties. Is it
realistic that the service consumer seeks best practice to
become a ‘better consumer’? Why? Why not?
❍ Has service become better as a result of our improved
insight? Why? Why not?
47 © 2022
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42. Contact
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Christian F. Nissen
cfn@cfnconsult.dk
+45 40 19 41 45
CFN Consult ApS
Nysøvang 15A
DK-2750 Ballerup
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