Complete guide to ITIL 4 framework

What is ITIL 4?

ITIL 4 is the latest version of the ITIL framework, a globally recognized framework for IT service management (ITSM) that was released in February 2019. It primarily focuses on bringing different organisational stakeholders together to co-create value for end-users in the digital era. With the arrival of new frameworks like VeriSM, SIAM, and FitSM in the IT service management landscape, there was a need for the previous version of ITIL (ITIL v3) to become more refined in the way it approaches service management as an enabler for business.

How is ITIL 4 different from ITIL v3?

ITIL 4 builds upon the best parts of ITIL v3 into a new framework more suited to the needs of organizations in the midst of their digital transformation journeys. The new version is more aligned with transformative technologies such as cloud, automation, and artificial intelligence (AI) than previous versions of ITIL.

Compared to ITIL v3, ITIL 4 provides a more holistic, flexible, and integrated approach to service management, focusing on value co-creation and continuous improvement in the digital age. Here are some key differences between ITIL 4 and ITIL v3:

Service Value System (SVS): ITIL 4 introduces the concept of the Service Value System, which replaces the Service Lifecycle approach of ITIL v3. The SVS emphasizes the co-creation of value, considering both internal and external stakeholders, and focuses on the holistic view of delivering value through services.

Guiding Principles: ITIL 4 introduces seven guiding principles that organizations should follow when adopting and adapting the ITIL framework. These principles include focusing on value, starting where you are, progressing iteratively with feedback, collaborating and promoting visibility, thinking and working holistically, keeping things simple and practical, and optimizing and automating.

Service Value Chain (SVC): ITIL 4 introduces the Service Value Chain, which represents a set of interconnected activities that contribute to the creation and delivery of value. The SVC includes six core activities: Plan, Improve, Engage, Design & Transition, Obtain/Build, and Deliver & Support.

Practices: ITIL 4 introduces a more flexible approach to practices compared to ITIL v3's processes. ITIL 4 includes 34 practices, which can be adopted and adapted based on the organization's needs and goals. These practices cover a wide range of areas, including service management, risk management, change control, incident management, and more.

Continual Improvement: ITIL 4 emphasizes the importance of continual improvement throughout the entire service value chain. It promotes the use of iterative approaches, feedback loops, and a culture of learning and improvement.

Expanded Scope: ITIL 4 expands its scope beyond traditional ITSM and incorporates concepts and practices from other frameworks and methodologies such as Agile, DevOps, and Lean. It acknowledges the evolving landscape of IT and the need for organizations to be more adaptable, responsive, and value-driven.

What is new in ITIL 4?

ITIL 4 has two significant components that are enhancements to the previous version:

• The Four Dimensions Model

• The ITIL Service Value System

The four dimensions of service management

Effective IT service management is more than just managing technology. It also includes different organizations within the company and the people involved in them, the company’s relationships with vendors and partners, and the different processes and technologies used within the business. These critical elements, now defined as the four dimensions of service management, are applicable to the ITIL Service Value System (SVS) and have a direct impact on the company’s service management. If all the dimensions aren’t addressed properly, it may result in the services becoming inefficient, or even undeliverable. ITIL 4 defines four dimensions that are essential in the process of co-creating value for customers and other stakeholders. They are represented in the following diagram.

Organizations and people

Clear reporting lines and well-defined roles and responsibilities are key to establishing a well-structured organization, which goes a long way in delivering efficient services. But an organization without a culture to support its objectives is unambitious. It also affects the way services are being delivered within the company. This culture comprises of people—the technical, non-technical employees, administrative staff, facilities management employees, security, etc. Together as one entity, people are the single most important asset of any organization. The cultural diversity they bring to the table is of vital importance to the effective functioning of a business. Though there are technologies and machines to do all the jobs that humans do, having the right people in the right places could prove to be invaluable to an organization. 

Information and technology

The Information and technology dimension described in ITIL 4 encompasses the technologies that support service management, workflow management systems, inventories, knowledge bases, analytical tools, and communication systems in an organization. In addition, it includes all the information created, stored, managed and used by the organization while delivering an IT service. Businesses now use technologies like artificial intelligence, machine learning, the Internet of Things and blockchain to process large amounts of data, which demands rigid information management policies. Organizations should take extra care to devise foolproof policies to manage these large amounts of information and urge all stakeholders to strictly adhere to them. 

Partners and suppliers

No service management ecosystem is complete without the partners and suppliers. Every organization is dependent on its partners and suppliers to some extent for their service delivery. This ITIL 4 dimension includes the relationship(s) of an organization with other organizations or individuals that are involved in the design, development, delivery, and support of services. Organizations depend on their partners at different levels. Some may focus on developing core competencies internally and rely on partners and suppliers for other needs. Some may depend on their partners as little as possible. One method organizations use to address this dimension is the Service Integration and Management (SIAM), where there is an ‘integrator’ to ensure that service relationships are properly coordinated. In any case, the partners and suppliers should align well with the organization’s core values and business goals in order to ensure smooth service delivery.

Value streams and processes

ITIL 4 describes this dimension as follows: It involves defining the activities, workflows, processes, and procedures needed to achieve the agreed business objectives in addition to determining how different components of the organization come together and work in unison to enable value creation through products and services. According to ITIL 4 definition, a value stream is a series of steps an organization undertakes to create and deliver products and services to consumers. These value streams are, in turn, enabled by processes that transform inputs into outputs. This dimension helps define the service delivery model, and identify processes that don’t aid any value creation for the business.

ITIL 4 Service Value System

The ITIL Service Value System (SVS) in ITIL 4 can be seen as a bird’s-eye view of an organization’s service management landscape. It depicts how all the activities and components of an organization work together for the creation of value. The ITIL 4 Service Value System interfaces with other organizations, forming an ITIL ecosystem for creating value for those organizations, and their stakeholders and customers.

Opportunity/Demand

Opportunity represents all the potential chances to create value for the end-users. Demand is the need for products or services. These two key inputs are always present in the system, but the organization doesn’t always capitalize on all available opportunities or focus on satisfying all the demands.

The 7 guiding principles of ITIL-4

It is a set of recommendations by ITIL 4 that guide an organization throughout its service management lifecycle, irrespective of changes that occur in the goals, strategies, or in structure of the organization. Axelos defines the following 7 seven guiding principles in the ITIL 4 foundation book.

Focus on value

Focusing on value centers around ensuring that every action, initiative, and service in IT service management directly creates value for the stakeholders, particularly service consumers. Creating value for service consumers requires understanding what is truly valuable to them and aligning services to meet those needs effectively. 

It requires a deep understanding of the customers' needs, preferences, and challenges to ensure that you design, manage, and deliver services to maximize value. This principle guides organizations to continuously evaluate and improve their value proposition in response to changing customer needs and market conditions.

Start where you are

Starting where you are emphasizes evaluating current capabilities and resources before launching new initiatives or making significant changes. It advocates for using existing assets to their fullest potential and making incremental improvements over reinventing the wheel with each new project. This principle encourages organizations to thoroughly assess current processes, services, and technology to identify what can be leveraged, optimized, or updated.

Progress iteratively with feedback

This principle underscores the importance of continuous, incremental improvements and using feedback as a critical input for each iteration. Rather than attempting large-scale changes that are difficult to manage and risky, ITIL 4 advocates for breaking work down into manageable sections that can be rapidly developed, tested, and improved upon.

Feedback from each iteration informs the next and helps services evolve in a way that more closely aligns with user needs and organizational goals. This approach reduces risk, fosters flexibility, and yields relevant and sustainable improvements.

Collaborate and promote visibility

Encouraging collaboration and promoting visibility across all levels of the organization is essential to effective service management. This principle highlights the need for transparent communication and cross-functional teamwork to foster a culture of trust, shared understanding, and collective responsibility for outcomes.

Breaking down silos and ensuring that information flows freely between teams allows organizations to ensure that decisions are informed, aligned with broader goals and that everyone is working towards a common objective. This openness also enhances problem-solving capabilities and innovation by bringing diverse perspectives and skills into the fold.

Think and work holistically

The principle of thinking and working holistically addresses the need to view the organization as an interconnected system where changes in one area can impact others. It encourages a comprehensive approach to service management that considers all aspects of the technology, processes, and people involved. This holistic view ensures that solutions are sustainable, align with organizational strategy, and contribute to a coherent and effective service management ecosystem.

Keep it simple and practical

Simplicity and practicality are at the heart of this principle, which advises against overcomplicating processes and solutions. It encourages focusing on what is necessary to deliver value and meet objectives efficiently, avoiding wasteful practices or overly complex approaches that can detract from the main goals. Organizations that prioritize simplicity can ensure they are using resources effectively, that processes are easy to understand and maintain, and that they deliver services in a straightforward, user-friendly manner.

Optimize and automate

Optimization and automation focus on improving efficiency and effectiveness by streamlining processes and leveraging technology. This principle advocates for identifying opportunities to refine and enhance operations before considering automation to eliminate manual, repetitive tasks. 

By optimizing processes first, organizations can ensure that automation efforts are built on a solid foundation, leading to greater efficiency, accuracy, and consistency in service delivery. This approach frees up valuable human resources to focus on more strategic, high-value activities and contributes to a more agile and responsive service management function.

How to use the 7 guiding principles

An organization should choose how to apply the seven guiding principles recommended by ITIL 4 depending on their relevance to a given situation. The principles interact with each other and are often interdependent, which is why organizations should review them on each occasion for their suitability. It is important to refer to these principles whenever there is a key business decision to be made or if there is a major change in a critical process. Some organizations may find it handy to display printouts of these principles across various departments so they are at hand in case of a challenging or tricky situation.

Governance

Irrespective of their size, all organizations are governed by a person or a group of people (usually the C-suite or the board of directors) who take complete responsibility for overseeing the function of the organization as a whole, or as individual units. ITIL 4 governance involves evaluation, direction, and monitoring activities whose ultimate goal is ensuring that the service value chain and the organization’s practices work well in line with the set business objectives.

Practices

A practice or ITIL management practice in ITIL 4 is defined by Axelos as a set of organizational resources designed for performing work or accomplishing an objective. In ITIL v3 (the previous version of ITIL), the framework consists of five stages as a part of the ITIL service lifecycle. Each stage consists of a set of processes or functions that are aligned with the IT organizational structure. ITIL 4, on the other hand, describes "practices" instead of processes. Although these two words are used interchangeably, they mean completely different things in the context of IT service management.

Continual Improvement

The core idea of continual improvement (CI) in service management is to constantly look for opportunities to improve the effectiveness and efficiency of IT services that enable business processes. It includes improvement across the organization's business units, products, services, processes, and relationships. In ITIL 4, continual improvement applies to all elements of the service value chain, the seven guiding principles, and is also recommended as a general management practice. Read more about continual improvement here.

Why is the Service Value System important?

The Service Value System (SVS) is a core concept in ITIL 4. The SVS represents a holistic approach to creating, delivering, and continually improving services. It is vital because it provides a comprehensive framework that integrates various service management components, including guiding principles, governance, service value chain activities, practices, and continual improvement. The Service Value System emphasizes the importance of creating value through services and ensuring every element of service management contributes to realizing organizational objectives.

Organizations can leverage the SVS to ensure their service management efforts are aligned and coordinated, leading to more efficient and effective practices. The system encourages a flexible and dynamic approach to service management, enabling organizations to adapt to changing business environments and customer needs. It also promotes seeking out feedback and using it to optimize services and processes.

The ITIL service value chain

ITIL 4 describes the service value chain as a combination of six key activities that work together to co-create value for end-users, by delivering a product or a service. The activities employ different combinations of ITIL management practices to perform a certain type of work. In addition, all these activities are interconnected and receive inputs from external sources or within the service value chain. Below is the list of activities described in the ITIL service value chain:

• Plan: Creating plans, policies, and standards and setting the direction for a certain value stream.

• Improve: Ensuring the continual improvement of the practices, products, and services offered by the organization.

• Engage: Establishing good relationships with all stakeholders and end-users, to provide transparency and a clear understanding of the products and services.

• Design and transition: Ensures that the products and services continuously meet stakeholders’ demands.

• Obtain/build: Ensures the availability of service components like hardware, software, services, etc., whenever and wherever they are needed.

• Deliver and support: Ensures that services are delivered and supported in a way that it meets the stakeholders’ expectations.

ITIL v3 processes vs ITIL 4 practices

Thus far, ITIL has been using the term “processes” to manage IT services. The new version, ITIL 4, expands the scope of processes so that elements such as culture, technology, information, and data management can be considered to get a holistic vision of how organizations work. The term “processes” in ITIL v3 is “practices” in ITIL 4. While 26 “processes” were defined in ITIL v3, the number of “practices” recognized in ITIL 4 is 34. The ITIL Service Value System includes 14 general management practices, 17 service management practices, and 3 technical management practices.

ITIL 4 practices

General management practices

Architecture management - It provides an understanding of how the different elements of an organization are interrelated and work towards achieving business objectives. It is instrumental in the plan, improve, designing, and transition of value chain activities.

Continual improvement - It aligns the organization’s services with the constantly changing needs by improving products, services, and practices at every stage of service delivery. The continual improvement model contains several steps that revolve around what the organization’s vision is, where they are at the moment, where they want to be (what they want to achieve), how to get there, take action, and analyze if they have achieved their goals in the end.

Information security management - Organizations store confidential and sensitive data like customer details, application information, etc. A clear understanding of confidentiality, risks, and integrity is required to ensure this data is secure. The information security management practice aims to balance establishing strong information security policies, conducting regular audits for compliance with international data security standards, implementing risk management processes and training the employees on the importance of information security.

Knowledge management - Knowledge in an organization comprises of information, skills, practices, and solutions in various forms. To protect this valuable organizational asset, the knowledge management practice maintains and improves the effective use of information across the organization through a structured approach.

Measurement and reporting - This practice aids in improving forecasting and decision-making at all organizational levels, from planning to user support. It provides information based on facts and measures the progress and effectiveness of products, processes, services, teams, individuals and the organization as a whole. Organizations use Critical Success Factors (CSFs) and Key Performance Indicators (KPIs) to measure the achievement of intended results. On the reporting front, data can be collected and presented through dashboards, which help support good decision making. 

Organizational change management - Any successful organization is bound to undergo many changes. It could be in the way people work, their behavior, their roles, the organizational structure, or the technologies used. The organizational change management practice ensures that everyone affected by such changes accepts and supports it, by providing training and awareness and tending to any adverse impacts that changes might have created.

Portfolio management - The portfolio management practice ensures that the organization has the right combination of products, services, and processes to achieve its business goals with the given funding and resource constraints. 

Project management - The project management practice involves a general set of processes and activities required to coordinate and implement organizational changes. It ensures that all projects across the company are planned, delegated, monitored and successfully delivered in stipulated time frames. The most common approaches in project management are the waterfall and agile methods. The former is used when the requirements are well-known, and the project isn’t subject to any significant change, while the latter is used when the requirements can change and evolve rapidly. 

Relationship management - This management practice establishes and nurtures the links between the organization and its stakeholders at different levels. If the organization is a service provider, most of its efforts are focused on maintaining a good relationship with its consumers. The relationship management practice contributes to all service value chain activities.

Risk management - Risks are an integral part of any business. For a business to sustain itself in the long term, calculated, smart risks are inevitable. But before taking any risks, there needs to be a clear understanding of those risks and their impacts on the organization. The risk management practice helps an organization understand, manage and effectively handle risks.

Service financial management - The purpose of the service financial management practice is to help the management decide on where to spend their financial resources to accomplish the financial objective of the organization. It is responsible for managing all the business's budgeting, costing and accounting activities. For this to be effective, the service financial management practice needs to be tightly aligned with the organization’s portfolio management and relationship management practices.

Strategy management - It’s a management practice that defines the goals for the organization and devises the plan of action, and allocation of resources required for achieving those goals. It also helps focus the organization’s efforts, and defines what to prioritize in line with its objectives and acts as guidance.

Supplier management - The supplier management practice enables proper management of the organization’s suppliers and vendors. It ensures that the received products and services are of high quality and do not affect the timely delivery of services. It also helps maintain a healthy relationship with different suppliers.

Workforce and talent management - The workforce and talent management practice aims to ensure that the organization contains the right people, with the right competencies, skills, and abilities at all the right places, in line with the company’s business objectives. This practice includes all activities related to recruitment, onboarding, engaging with the organization’s employees, learning and development, and performance measurement.

Service management practices

Availability management - In an organization, products and services should be available as and when needed by the stakeholders for successful service management. The purpose of the availability management practice is to ensure that an IT service or an asset is able to perform its function whenever required. 

Business Analysis - The business analysis practice helps analyze a business or some element of it, identifies problems, communicates the needs for change in an easy-to-understand manner, and suggests solutions to solve those problems. It holds high significance in value creation for different stakeholders in the organization.

Capacity and performance management - For effective service management, the services delivered by an organization should achieve expected performance without exceeding agreed costs. In addition to satisfying current demands, they should meet the business requirements in the long term. This is ensured by the capacity and performance management practice.

Change control - While change management focuses on the people side of changes implemented in the organization, change control focuses on the changes in products and services. It could be caused by factors like IT, applications, processes, relationships, etc.

Incident management -  The incident management practice ensures that the best possible levels of service quality and availability are always maintained. It aims to restore normal service operation as quickly as possible, in addition to minimizing the adverse impact on business operations caused by those incidents.

IT asset management - All components that contribute to the delivery of an IT service are called IT assets. The IT asset management practice helps in planning and managing the entire lifecycles of these assets, which helps the organization manage costs and risks, increase value, and make better purchase decisions.

Monitoring and event management - It helps constantly observe services within the organization and record all associated events. These events are a change of state that impacts the product on service delivery. Monitoring and event management is highly helpful in identifying information security events and aid in responding with appropriate solutions. 

Problem management - The goal of problem management is to prevent problems and resulting incidents from occurring and to eliminate recurring incidents. It also helps minimize the impact of incidents that cannot be prevented. This is done by identifying the root causes of such incidents devising workarounds and known errors.

Release management - Release management aims to build, test and deliver the new and changed services that fulfill the agreed service requirements by achieving the intended objectives. It ensures the satisfaction of all stakeholders of the organization.

Service catalog management - This practice involves activities like setting up a portal that contains all the product and service offerings, with the aim of providing consumerized IT services. It enables communication with the intended audience about the list of services that are provided by the organization.

Service configuration management - This management practice involves collecting and managing information about all the available configuration items (CIs) within the organization. CIs include hardware, software, networks, people, vendors, etc. Service configuration management provides information on what CIs contribute to the business and describes their relationship. 

Service continuity management - Organizations are not exceptions to disasters. Such unplanned events could cause serious damage to the organization, including failure to provide critical business functions continuously. Service continuity management provides guidance for business continuity and ensures IT and services can be resumed after a crisis.

Service design - Improper design of products and services results in failure to meet the customers’ needs. The service design management practice helps design products and services that fit the organization’s ecosystem, facilitate value creation and help realize the business objectives. It includes planning and organizing people, partners, suppliers, IT, communication, and processes.

Service level management - Services delivered by an organization need to achieve a minimum level of quality as defined. The service level management practice helps set targets for these service levels and involves all activities related to monitoring, measuring, assessing, and managing the delivery of services through service level agreements (SLAs).

Service request management - Users in an organization request information, or an IT service whenever they have a need. These are called service requests. Password reset requests are a great example of service requests. The service request management practice involves managing these service requests in an efficient and user-friendly manner.

Service validation and testing - All new or changed products and services in an organization need to be checked if they meet the defined requirements, and should be verified through testing. This is done through service validation and testing practice.

Technical management practices

Deployment management - Working closely with release management and change control, the deployment management practice deals with setting up new/changed hardware, software, processes or any other such component in a live environment. Different approaches include phased deployment, continuous delivery, big bang deployment, and pull deployment.

Infrastructure and platform management - For an organization’s Information Technology, the infrastructure and platform management aids in managing technology resources like storage, networks, servers, software, hardware, and configuration items used by the customers. It also includes the buildings and facilities the organization uses to run its IT infrastructure.

Software development and management - The practice of developing software applications, ranging from a single program to operating systems and large databases, is significant for organizations in creating value for customers in technology-based services. It is managed using two widely popular approaches - waterfall and Agile.

ITIL 4 qualifications

Candidates who wish to acquire qualifications in ITIL 4 can do so at the following levels:

• ITIL Foundation

• ITIL Specialist modules x3

• ITIL Strategist

• ITIL Leader

• ITIL Master

ITIL 4 certification

Like ITIL v3, the ITIL 4 certification path also takes a modular approach, starting from the foundation to the intermediate (Managing Professional and Strategic Leader) and master levels. The following diagram represents the complete course structure of ITIL 4.

ITIL 4 certification scheme

The ITIL 4 Foundation is an entry-level course covering the fundamentals and basic terminologies of service management. The intermediate level is comprised of five different courses:

• ITIL Specialist - Create, Deliver & Support

• ITIL Specialist - Drive Stakeholder Value

• ITIL Specialist - High-Velocity IT

• ITIL Strategist - Direct, Plan & Improve

• ITIL Leader - Digital & IT Strategy

Completing the three ITIL Specialist courses and the ITIL Strategist course makes the candidate an ITIL Managing Professional (MP), whereas completing the ITIL Strategist and the ITIL Leader courses will make them an ITIL Strategic Leader (SL). The Managing Professional (MP) course provides practical knowledge about running successful IT projects, teams, and workflows. The Strategic Leader (SL) course targets IT professionals who seek a clear understanding of how IT influences and directs business strategies.

The impact of ITIL 4 update on your business

The impact will depend on your organization's IT maturity level and whether your business has had any previous exposure to prior ITIL versions. While many ITIL processes have remained the same in the new version, the framework has been reorganized and restructured for an era when cloud, automation, and AI are gaining significance.

If your business has never used ITIL before but wants to adopt the standards and practices associated with a global framework, ITIL 4 is a timely update. There is now enhanced guidance within the framework that businesses can quickly follow to adopt its practices and set out on a path to value co-creation.

Be ITIL ready with Freshservice’s service desk

Organizations focus heavily on processes and technology to deliver service excellence to their customers. Following industry best practices and frameworks—such as those provided in ITIL 4—allows companies to realize their objectives easily. This directly influences productivity and improves customer satisfaction. But, the key here is to adopt only the necessary and suitable best practices for your business model. This helps in providing excellent service support and delivery.