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ITIL4 brings customer experience to centre stage

18th Nov 2019
Director Invensis Learning
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At first, we were told the customer is King. We do whatever it takes to provide the best customer experience (CX). That means creating value with every product or service which a customer will be happy to use or consume. If customers do find value in a product or service, they will willingly pay for it and the product or service provider who ‘delivers value’ will earn money.

Clearly, value is not a one-way street.

The onus of creating/utilising value rests on both businesses and customers. Customer is King, yes but he is the subject too; he is served and he has to accept and use the service to endorse it and thus serve right back. He has to ‘co-create’ value; he plays an equal role in making a product or service a success. In other words, both the service provider and customer have to ‘collaborate’ to imbue value into …well, value.

ITIL4, the latest version of the IT Service Management (ITSM) framework, introduces the concept of ‘value co-creation’ in ITSM.  Let us analyse this in some depth.

Value co-creation

ITIL4 Foundation Manual from Axelos defines value as “the perceived benefits, usefulness and importance of something.”

ITIL V3 defined service as a “means of delivering value to customers by facilitating or promoting outcomes that customers want to achieve, but without the ownership of specific costs or risks.”

ITIL4 says service is “a means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.”

The concept of service can be explained with a simple example. A customer of telecom services pays for the convenience of making and taking calls and messages. The value of communication is not only passed on by the service provider but also used and appreciated by the consumer who pays the service provider for this value. However, the consumer does not want to share the expenses on maintenance of cables, ensuring 24x7 service, or network failures.

Shifting responsibility to customer

ITIL4 takes the concept of value a step further to make various stakeholders participate in the creation of value. It calls on service providers, customers, ‘suppliers and partners’ to co-create value.

Let me apply this to the telecom service provider example again.

A telecom company gives value-added services (VAS) like mobile money, ringtones, live streaming and SMS. These services attain value only when a VAS content provider delivers what the customer wants.

Suppliers (equipment, infrastructure) and partners (broadband services, resellers, intermediaries) of the telecom operator too have a responsibility to co-create value in the solutions they create or products and services they offer, in such a manner that the customer is benefited.

In fact, I would add even regulators need to play a role by ensuring competitive pricing, network quality and contractual flexibilities. Thus, all stakeholders have to come together to co-create and enhance the customer experience (CX).

To my mind, ITIL4 shifts the responsibility of value creation from organizations to the consumer, to an extent. Any marketing pundit will tell you that the consumer has always been involved in the creation of value. Which is why customer feedback is considered sacrosanct.

Stakeholders’ collaboration

ITIL4 2019 Update (which incidentally also denoted the Fourth Industrial Revolution) makes the customer’s role in value co-creation more explicit and hence more binding. Borrowing the definition from Businessdictionary.com, it says: “Co-creation is as business strategy focusing on customer experience and interactive relationships. Co-creation allows and encourages a more active involvement from the customer to create a value rich experience.”

As ITIL4 underscores the role of suppliers and partners as well, it clearly seeks to make co-creation a collaborative effort, in keeping with modern approaches to project management like Agile, Lean and DevOps. It is pertinent to note that one of the seven guiding principles of ITIL4 is: Focus on Value. However, value is also a matter of perception. If all stakeholders are to focus on co-creation of value, with the end-user in mind the organisation should give importance to:

  • Who the end-user is?
  • What is ‘value’ in the eyes of the end-user?
  • How to deliver this value?

The customer or consumer on his part has to share:

  • What exactly his needs are?
  • Problems encountered in use of product/service
  • Choices earlier in development process to manage risks and costs

In a sense, the value co-creation process turns into a customer experience management project right at inception.

The service value system

Moving from the ITIL V3 waterfall method of implementing a service lifecycle (silos like service strategy, design, transition, operations and continual service improvement), ITIL4 has introduced the Service Value System (SVS).

The SVS will break silos through a Service Value Chain of activities comprising many Value Streams (tasks to be performed in specific situations, within set processes). It will use capability-driven practices, instead of output-oriented processes to ensure meaningful outcomes.

Service value system

Source: Axelos, ITIL Foundation, ITIL4 Edition 2019

As seen in the above diagram, there are six value chain activities that will together create value through the ‘change control’ practice (one of 34 management practices in ITIL4). Change Control Practice strives “to maximize the number of successful service and product changes by ensuring that risks have been properly assessed, authorizing changes to proceed and managing the change schedule.” Here is how it will unfold across the value chain activities:

  • Plan – change in everything from planning new IT services to policy update
  • Improve – change to ensure and drive continual improvement in everything -not just service
  • Engage – inform customers about proposed changes
  • Design & transition – transition new or improved services into the live environment
  • Obtain/build – ensure scope of change control extends to components of services in addition to the services themselves
  • Deliver & support – support tasks that drive business-as-usual work

From the information made available by ITIL4 Foundation material, it is evident that the ITIL4 Service Value System gives the customer a buy-in early on in the value-creation exercise. What is important is to acknowledge that CX improvement begins with feedback. It is only when CX inputs –in terms of satisfaction, loyalty and net promoter score - are sought and received before, during and after the design and transition stage, that meaningful changes can be brought.

As data and feedback increases exponentially in the AI-driven, cloudified automated world, it is possible that CX improvements can be made real-time and with personalised embellishments. Already, intelligent linguistics analysis (repetitive vocabulary) provide insights into customer sentiments and pain points. 

ITIL4 certification modules are to be released through 2020. As we wade through the professional stage on to the managing professional, strategic leader and master levels, I am sure there will many more radical learnings in the customer experience management realm.   

 

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