How Many Service Provider Types Does Itil Identify

At the eye of ITIL^® is Service Direction. Whether you provide sports gear or pedicures, the reason your organizations exists is to deliver quality services that:

Enable the client to achieve their goals
Provide value for money for the organization

Service management is a set of specialized organizational capabilities for enabling value for customers in the course of services. These capabilities include tangible things like capital, people, and equipment, and tin also include intangible things like noesis, management and skills. These capabilities can also include intangible things, like knowledge, management, and skills.

The goal of It service management is to maximize the value delivered and obtained from engineering-driven products and services. To succeed at service management, these concepts are crucial:

Value co-creation
Stakeholders in service management
Service relationships
Products & services
Value: Outcomes, Costs & Risks
Utility & warranty

(This article is part of our ITIL iv Guide. Use the right-hand carte du jour to navigate.)

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Value Co-Cosmos

The purpose of an arrangement is to create value for stakeholders. Here, value is divers as:

Perceived benefits
Usefulness
Importance

Value is bailiwick to the perception of the stakeholders, whether they be the customers or consumers or the organization itself. Think near a ride sharing service: for some people the value is convenience; for others information technology might be cost or flexibility. Value can be subjective, depending on the point of view.

In the by, organizations viewed themselves as 'service providers', delivering value to their customers in a mono-directional manner: the provider delivering value to the customer, while the customer plays no role in value creation. This model, however, has become outdated.

Organizations at present recognize that value is co-created through an active collaboration between providers and consumers. This co-creation is augmented by the work of other stakeholders which are part of the relevant service relationships.

Stakeholders in Service Management

This new perspective of value co-cosmos results in a critical need to place all the players who are involved. This could include suppliers, consumers, financiers, regulators—even influencers. Let'south identify some of the principal stakeholders in service management:

Stakeholder	Definition	Case
Organization	A person or a group of people that has its own functions with responsibilities, authorities, and relationships to achieve its objectives.	A company, an establishment, or an private
Service Provider	An system that takes up the office of creating and delivering services	An airline that provides air transportation services
Service Consumers	An system that takes up the role of receiving services	A business organisation that buys and uses internet services from an Internet access provider

The term service consumer is generic by nature, and then nosotros can further delineate roles such as:

Customer: A person who defines the requirements for a service and takes responsibility for the outcomes of service consumption; e.g., the IT Manager.
User: A person who uses services; e.grand. the company employees.
Sponsor: A person who authorizes budget for service consumption; e.m., the Finance Manager.

Note that these terms can be used by a single individual who can act equally the customer, user, and sponsor of a service they accept bought and consumed.

Beyond the consumer and provider roles, many other stakeholders are often important to value creation. Identifying these roles in service relationships ensures constructive communication and stakeholder direction.

Service Relationships

A service relationship is defined every bit the cooperation between a service provider and service consumer. Service relationships are established between two or more organizations to co-create value. An system can play the function of provider or consumer interchangeably, depending on the state of affairs.

Service relationships include:

Service provision
Service consumption
Service human relationship management, which are the joint activities performed by a service provider and a service consumer to ensure continual value co-creation based on agreed and bachelor service offerings.

The service relationship model is used to showcase the e'er-changing interaction between service providers and consumers. An organization can procure services and utilise them to deliver services to some other consumer, thus shifting from consumer to provider. For example, a call centre may purchase internet services from a supplier and and then use those services to provide client relationship management services for its customers.

Products & Services

In ITIL, the service is the ultimate center of focus in every attribute of service management. A service is defined every bit a means of enabling value co-cosmos past facilitating outcomes that customers desire to achieve, without the customer having to manage specific costs and risks. The services that an organisation provides are based on one or more of its products.

A product is whatsoever configuration of an organization's resource designed to offering value for a consumer. Resources can include people, capital letter, equipment, software, etc.

Service providers usually present their services to consumers in the form of service offerings, which describe one or more services based on ane or more products. A service offer is a description of one or more services that are designed to address the needs of a target consumer group. The three principal components of service offerings are:

Goods
Access to resources
Service actions

Here are some examples:

Component	Description	Examples
Goods	Supplied to the consumer Ownership is transferred to the consumer Consumer takes responsibility for future use	Appliances Consumer goods
Access to Resources	Ownership is not transferred to the consumer Access is granted or licensed to the consumer under agreed terms and conditions The consumer can only access the resources during the agreed consumption menstruum and according to other agreed service terms	Web hosting Deject Storage Online gaming subscription
Service Actions	Performed past the service provider to address a consumer'due south needs Performed co-ordinate to an agreement with the consumer	Car maintenance IT user support

Different offerings can be configured for different target consumer segments depending on:

Demand
Capacity to pay
Boosted factors/span>

Value: Outcomes, Costs & Risks (VOCR)

Service providers help their consumers to achieve outcomes and, in doing so, take on some of the associated risks and costs. However, the service relationship can outcome in negative outcomes or innovate new or previously unknown risks and costs.

Service relationships are perceived as valuable but when they accept more positive effects than negative, particularly regarding impact on outcomes, costs, and risks.

Value as a function of outcomes, costs, and risks

Outcomes

When an organization acts equally a service provider, it produces outputs that aid its consumers to achieve certain outcomes. An output is defined equally a tangible or intangible deliverable of an activity; for example, transportation from i location to another.

An outcome, by contrast, is the result for a stakeholder that was enabled past one or more than outputs. If the output is transportation between locations, the outcome might be that the stakeholder has an interview or medico's date.

Depending on the relationship betwixt the provider and the consumer, it tin can be difficult for the provider to fully empathise the outcomes that the consumer wants to achieve. In some cases, both parties will piece of work together to define the desired outcomes.

Costs

Costs are the corporeality of money spent on a specific activity or resources. From the service consumer's perspective, there are two types of price involved in service relationships:

Costs removed from the consumer past the service (a part of the value proposition). For example, for a car sharing service, the customer does not pay for the actual toll of purchasing the car.
Costs imposed on the consumer past the service (the costs of service consumption). In a auto sharing service, the customer pays for cellular or internet services to request the service.

The two types of cost must be fully understood if a service provider is to obtain value for coin and ensure the right decisions are made about the service provision. Providers demand to ensure that services are delivered within budget constraints and meet the fiscal expectations of the system.

Risks

A risk is any event, including possible events, that could crusade impairment or loss or make it more difficult to attain objectives. Risk is considered an uncertain upshot, one that that tin be positive or negative. Ii types of adventure are apropos to service consumers:

Risks removed from a consumer by the service (part of the value proffer). For instance, for an online streaming service, the failure of equipment involved in delivering the service.
Risks imposed on a consumer past the service (risks of service consumption). For an online streaming service, the threat of lawsuit for copyright infringement.

It is the duty of the provider to manage the detailed level of chance on behalf of the consumer. However, the consumer has a role to play in contributing to run a risk reduction every bit a function of value co-creation. The consumer contributes to reducing risk by:

Actively participating in defining the service requirements and clarifying its required outcomes, often on an ongoing basis.
Clearly communicating the disquisitional success factors (CSFs) and constraints that use to the service.
Ensuring the provider has access to the necessary consumer resources throughout the service human relationship.

Utility & Warranty

How do we know that a service is delivering value for the consumer and meeting the service provider's requirements? By evaluating, in totality, the utility and warranty of the service.

Utility is the functionality offered by a product or service to meet a particular need. Utility perhaps answers 'what the service does' or whether a service is 'fit for purpose'. To have utility, a service must either support the performance of the consumer and/or remove constraints from the consumer.
Warranty, on the other mitt, is the balls that a product or service will meet agreed requirements. Warranty answers 'how the service performs' or whether a service is 'fit for employ'. Warranty frequently relates to service levels aligned with the needs of service consumers, such every bit availability, chapters, security, and continuity.

When assessing a service, you must consider the bear upon of costs and risks on utility and warranty—this generates a consummate motion-picture show of the viability of a service. Both utility and warranty are essential for a service to facilitate its desired outcomes and, therefore, help create value. For example, if you are using a courier commitment service, the utility involves the delivery of your packages while warranty is nearly the speed and treatment of your packages.

ITIL^® is a registered trade mark of AXELOS Limited. IT Infrastructure Library^® is a registered merchandise marker of AXELOS Limited.

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About the author

Jon Stevens-Hall

Jon Stevens-Hall is a Primary Product Director for BMC Helix ITSM. He was a contributing writer on several of the ITIL 4 Managing Professional books ("Create Evangelize and Support", and "High Velocity IT"). His work focuses on innovative new tooling for Service Direction, and the evolution of ITSM in the DevOps era.

About the writer

Joseph Mathenge

Joseph is a global all-time exercise trainer and consultant with over 14 years corporate experience. His passion is partnering with organizations around the world through training, development, accommodation, streamlining and benchmarking their strategic and operational policies and processes in line with all-time practice frameworks and international standards. His specialties are It Service Management, Business Process Reengineering, Cyber Resilience and Project Direction.