Key concepts of service management (5 questions, 12.5%)
Services, value and outcomes
15 min
ITIL 4 tests exact definitions. Most errors come from mixing two neighboring terms.
| Term | ITIL definition (shortened) |
|---|---|
| Service | A means of enabling value co-creation by facilitating outcomes customers want, without the customer managing specific costs and risks |
| Service management | Specialized organizational capabilities for enabling value for customers in the form of services |
| Value | The perceived benefits, usefulness and importance of something |
| Product | A configuration of an organization's resources designed to offer value for a consumer |
| Service offering | A formal description of one or more services for a target consumer group: goods, access to resources, service actions |
| Output | A tangible or intangible deliverable of an activity |
| Outcome | A result for a stakeholder enabled by one or more outputs |
| Cost | Money spent on an activity or resource |
| Risk | A possible event that could cause harm or loss, or make objectives harder to achieve; also uncertainty of outcome |
| Utility | Functionality offered to meet a need: what the service does (fit for purpose) |
| Warranty | Assurance the service meets agreed requirements: how it performs (fit for use) |
| Example: email service | Classification |
|---|---|
| Send and receive messages | Utility |
| 99.9% availability, 50 GB mailbox, encrypted | Warranty |
| A delivered message | Output |
| A sales team closes deals faster | Outcome |
| No servers to buy or patch | Cost and risk removed from the consumer |
| License fee, user training time | Cost imposed on the consumer |
Value requires both utility and warranty. A feature that is often down delivers no value.
Output is what an activity produces; outcome is what the stakeholder gains. A report is an output; a better decision is an outcome.
Warranty covers availability, capacity, security and continuity. Answers about these are warranty, not utility.
Word bank
All definitions →- Utility
- Fit for purpose: what the service does.
- Value co-creation
- Provider and consumer both contribute to the value; the provider does not deliver value alone.
- Warranty
- Fit for use: how well it performs.
Knowledge check
A cloud backup service guarantees a four-hour restore time. This is an example of:
Which is an outcome?
Which describes a service offering?