Coming to Grips with ITIL 4’s Service Value Chain

Learning complex ideas and concepts

We have all spent our lives learning and mastering complex concepts. We started with learning how to walk, talk, eat, play, etc. They took time and, although we didn’t realize it, we learned imperfect simplifications first, then progressed to more complete and detailed comprehensions, and finally how to apply them. Think how we proceed from shaky first steps through running during a football game – progressing from total concentration on the basics to unconscious command, using the skills to deliver higher-level goals (literally goals in the case of football). It’s human nature to do this and it applies to first learning and learning new concepts at work too, and specifically, for this blog, some of the new ideas included with ITIL 4. In case you want to learn more about the way we learn, Professor Ian Stewart has written about it and given it a name: “lies to children.”

Service Value System, Chain, and Stream

At the heart of ITIL 4 is the concept of creating value. The “service value system” illustrates this and, at the core of that system, is the “service value chain,” and driving us through that chain are “service streams.” These terms are carefully defined in the ITIL book:

  • Service value system A model representing how all the components and activities of an organization work together to facilitate value creation
  • Service value chain – An operating model which outlines the key activities required to respond to demand and facilitate value realization through the creation and management of products and services
  • Service stream – A series of steps an organization undertakes to create and deliver products and services to consumers 

If you’ve never previously encountered these kinds of concepts, then it won’t be immediately clear and obvious from these definitions. If it is obvious to you, then you may stop reading, go to the top of the class and feel proud. If not, then you might obtain some insights by continuing to read. 

Using these concepts is massively powerful, and they are also massively flexible. If, however, they are presented in terms of the complex real-life situation which we address within our work, then they appear, at first sight, to be difficult and complicated ideas to understand. They’re difficult to start using until we do understand the basics behind them. Reading the definitions and rushing to apply them to complex environments can feel like trying to run before you walk. 

Perhaps, instead, it feels like trying to understand the best way to use Lego bricks only by looking at a completed Lego cathedral. Let’s look at the hierarchy of value system, chain, and stream in the simplest terms: try to understand the bricks and how we could build something simple to start.

Service Value System

A Service Value System (SVS) simply establishes categories of tools, techniques, and mechanisms readily available to an organization to make things happen and to ensure they are done safely, properly, legally, etc. They’re just categories, you might use them all or use some, and you might have some others or different names for them. All that’s OK, but the system (as the word implies) is knowing you have them and use them to support each other. 

ITIL 4’s SVS has five categories with which we are mostly familiar in ITSM. There are four you might see as sources of information, approach, rules, skills, etc.:

  • Guiding principles – Universally applicable common sense, always good to consider
  • Governance – Setting and policing the rules, setting our boundaries and making sure we stay within them
  • Practices – Distilled best practice – approaches and procedures that seem to work – customize them to your exact situation, of course
  • Continual improvement – Because we need the right mindset to continue to improve

The fifth element is the service value chain, documenting the kind of journeys we must take, traveling from a demand – identifying a need or reason to do something – through delivering the value from it. 

Service Value Chain

A value chain identifies the steps of that journey (from demand to value). Value chains can be applied just about anytime we are creating value from resources (goods, skills, money, etc.). In fact, we probably do this several times a day, but don’t necessarily formally. 

In most homes, there is a demand for dinner each evening – a request isn’t required each day, but it’s there all the same. To deliver the value of a healthy dinner, there are logical steps we must follow:

  • Determine what people do and don’t like
  • Understand what is healthy, what isn’t, how much money we have, what’s available, etc.
  • Obtain the components – food, drink, cooking equipment, time, skills, etc.
  • Make it happen – cook, buy, serve
  • Deliver it – on plates and on the table – and then eat it
  • Clean the kitchen afterward – washing dishes, gathering feedback (did you like that? Want it again one day?)

Notice that this is a generic travel plan that we can apply to a range of different kinds of dinners – ready-meal, cook-from-scratch, order-in or even go out to eat. It maps the journey at a high level – shortly, you’ll see how this analogy is used to build specific instances (via value streams).

For ITSM, ITIL 4 offers us six “value chain activities” – steps/categories with which to build our ITSM service value chains:

  1. Plan
  2. Improve
  3. Engage
  4. Design and transition
  5. Obtain/Build
  6. Deliver and support

Notice that these are (deliberately) quite wide and generic aspects, and we will use them as needed. It isn’t necessary to use each one, use it only once or follow any other rules. We use the aspects as we need to build the value chain – our journey to value – as we feel is best for our situation.

Value Stream

These are useful ideas, but all I’ve revealed is how things are done. The value chain indicates the kinds of journeys we must make. Every day, in our real worlds – at home and at work – we must travel-specific journeys. For those specific kinds of journey, we will build value streams, the more detailed trip and how we take it. For example, referring to the dinner example, there would be a range of streams, here is a simplified example of what it might contain – and how the steps map onto the ITIL 4 value chain activities. Here is one for “proper’ cooking”:

  • Plan the menu (plan)
  • Buy the ingredients (obtain/build)
  • Cook the food (obtain/build)
  • Serve it on plates (design and transition)
  • Assemble the family (engage)
  • Eat the food (deliver and support)
  • Ask if he and she liked it (engage)
  • Clean the kitchen (deliver and support)

This isn’t meant to be complete, it’s an illustrative example. We can debate what steps might be missing, whether the stages have been allocated to the right activity, even which order they should come or if we should be doing them at all. All that is good and should be encouraged: seeing the elements, understanding the steps and seeing what value each one adds, discussing and arguing about them. Those are what make value chains and streams useful because they expose what we do and allow us to add any activity I didn’t include in the cooking example: improve!


This blog isn’t meant to show you how to use these concepts in your complex work environment. Its purpose was to help you see some ideas underpinning them and allow you to build on that simple illustration and make use of them in due course. Using tools like these – as with using any kind of tool – takes time, practice and patience to receive the best results. Tools only deliver the best results when they are the right tools for the job. Value chains are not a magic bullet – they aren’t the answer to everything. Used well, however, and at the right time, they will make your job easier and improve your performance.

Blog cover by Sharmila