Sometimes when we talk about products and services we can't help but talk about value. But what is value? This first thing that might cross our minds usually has something to do with monetary worth equating value to market price. But when we talk about systems and processes, we have to go beyond price. In ITIL 4, value is the perceived benefits, usefulness, and importance of something. This definition is still very generic but let us understand deeper because value is an extremely important concept inside of ITIL and service management in general.
First, ITIL 4 considers value as perceived. This means that the value of something is always subjective. But who determines this perceived amount of value? That privilege is reserved for the recipient of the value. Let's look at Julia and John, two roommates. They decide one afternoon they want an orange. So they both go to the fridge thinking about satisfying their need; only to find out there’s only one orange. Now, they argue about who should get the orange. Julia contends that she is hungry and so she should be the one to get the orange. In her mind, she will peel the orange, eat it, and discard the peeling. To her, only what is inside the orange has value to her. John, a baker, needs the orange peelings to flavor a cake he had been planning to bake. To him, the orange peelings held all the value of the fruit. So looking at them both, they each perceived a different value on that one product – Julia valued, the orange flesh while John valued the peeling. Now, this story wouldn’t really hold much water until we take a step back to where the orange was bought. Let us now put the grocer who sold the orange into the picture. Had the grocer known that they both value that $1 orange for different reasons, maybe he would have cut the orange apart, separated the insides away from the peel and sold each portion for a dollar and would’ve doubled the orange's value for himself.
From the anecdote above, always remember that the amount of value that something has is based on the recipient's perception of that value. It's the recipient that expects to get the value from the products, relationships, services, and whatever it is a business or organization is expected to deliver. And because of this, value is always subjective and can differ from what the product or service the provider originally hoped could be achieved. It may be different from what they had described the product as or what service it was going to fulfill, and from what we originally agreed to.
This subjectivity should be captured, measured, and evaluated because this is what we have to work with as a business or organization that performs service management. Value was specifically chosen by the creators of ITIL because service management goes beyond just services these days. Because the perceived benefits and usefulness of something would depend on the context that it's being talked about. In each given context, we know what that something is and we know what it means in the value definition. But in a generic definition, we can't simply list all of the things something could be. So something becomes that placeholder. Because when we talk about value, value is really based on these relationships as well.