Services and Products
ITIL was created around the idea of conducting service management within organizations. In order to build on that idea, the ITIL creators had to come up with their definition of a service. For purposes of the ITIL 4 exam, it is paramount to not forget the definition of a service as well as really understand it. In ITIL 4, a service is a means of enabling value co-creation by facilitating outcomes that the customer wants to achieve, without that customer having to manage the specific costs and risks. In today’s blog, we will dissect that definition.
The first portion of the definition of service is that it is a means of enabling value co-creation. Remember how value is determined as a result of the relationship between the provider of the service and the customer of that service? This is what it references. The second portion of the definition says that value co-creation is achieved by facilitating outcomes that the customers want to achieve. This goes back to the concept of value. If a service provider doesn't help you as the customer to achieve your objectives, it doesn't have any value. After all, the service provider alone can't achieve your objectives for you. You have to achieve them yourself aided by the service provider facilitating the outcomes.
In the case of passing the ITIL 4 exam, you have to take the exam yourself. Itil.diontraining.com can only provide you with the tools and the resources you need, to be successful in passing it. This is also true with IT services. IT personnel can ensure your computer is up and able to run a program. But if you don't provide the necessary inputs, you won’t get the necessary outputs and results you want to achieve from that program.
Now, the final portion of this service definition is that this co-created value is created without the customer having to manage specific costs and risks. This refers to the whole reason why a customer hires a service provider in the first place. For example, you’re a customer of a web-hosting company that hosts all of your websites. In exchange for that service, you pay them a nominal monthly fee. It's their job as your service provider to manage all the specific costs and risks associated in making sure that you and your customers are able to access your websites. After all, you are in a business other than maintaining a website. It’s the web-hosting company, your service provider, who gets to deal with it. This is exactly what the service definition is referring to.
A service organization can also provide products based on services that they have as well. Now, a product is a configuration of an organization's resources that's designed to offer value for a consumer. Think of this as the collection of services that were put together to give more value than they could individually. Every organization works with a set of resources. These resources are either owned by the organizations, belong to the organization, or are managed by the organization. These resources may even be supporting services provided by the organization’s suppliers and their partners. These resources can be leased or rented. These resources could even be the people who work in an organization under a contractual agreement as these people are a resource to the organization too.
So, the way an organization configures all those resources into a set offering is the essence of a product. For example, Amazon Web Services or AWS, has a lot of different service offerings. Including server-hosting, under their EC2 brand, file storage or S3, domain name server systems or Route 53, and many others. But, these services aren't necessarily considered products. If you compare these individual services with the Amazon Lightsail product, you’ll notice that Amazon has combined EC2, S3, and Route 53 into a single product that can be sold directly to a customer in a defined configuration. Each component that makes up Lightsail is each available as a standalone service. But when all 3 are combined as Lightsail, Amazon has removed a lot of the complexity and confusion associated with that typical new-customers' journey, into the AWS and into cloud computing.
So, we have just talked about two key definitions that ITIL 4 practitioners have to understand deeply. First, a service is a means of enabling value co-creation by facilitating outcomes that the customer wants to achieve, without the customer having to manage those specific costs and risks. Second, a product is simply a configuration of an organization's resources designed to offer value for a consumer. These two definitions are good solid foundations of ITIL 4.