Why  ITIL  is important
In business and  technology  circles, the IT Infrastructure Library, or ITIL®, is viewed  as the most widely accepted approach to IT Service Management (ITSM) in the world.

Owned by the British government’s Office of Government Commerce, ITIL provides  a cohesive set of best practices,  drawn from both public and  private sectors. ITIL is the backbone to structuring IT organizations that optimize service quality, improve service levels and  reduce  costs—and  it’s becoming increasingly important to today’s corporations.

In fact, a recent industry analyst report notes that by
2008,  more than half of all enterprises  will be looking to standardize ITSM processes  based  on ITIL. What’s more, industry analysts have observed  that many corporations are looking into improving their infrastructure management processes, as demonstrated by the strong interest in ITIL and  other process rationalization methods—implying  that the ITIL approach is well on its way to becoming the de facto standard for service delivery.

Why  update  ITIL? Why now?
Just as business and  technology  are constantly evolving, so too is the approach to ITSM—making this the ideal  time for an ITIL refresh.

Certainly the IT industry has matured  since ITIL V2 was published  in the late 1990s. That version put greater emphasis on what service management is—rather than how you can best approach it. The last version also centered  on processes  for Service Delivery and  Service Support, all of which aligned  to activity and  output but not necessarily  to value.

ITIL V3 represents  a significant shift in how IT is viewed in the greater  business context. With the realization
that managing IT requires  more than just a set of processes  comes an increased focus on managing the service lifecycle and  providing  value to the business— with an emphasis on how technology can best be leveraged to enhance that value.

ITIL V3 brings service management in line with changing business needs  and  priorities, advancing technology  and  new governance models. The refreshed version is better aligned  to the needs  of CIOs and  the businesses  they serve. It features modifications designed to speed and  simplify the implementation,  adoption and  application of service
management processes  to optimize business outcomes.

On a practical  note, the new version includes updates  that:

• Clarify the business benefits to be derived  from ITIL

• Improve its usefulness and  applicability

• Make it easier to implement ITIL

• Leverage real-world advancements since V2, including tools, technology  and  relationship types.

What has changed?
While there are no fundamental departures from the basic principles and  processes  that have constituted ITIL since the beginning, the differences between  ITIL V2 and  ITIL V3 are a direct result of maturity in the market and  a deeper understanding of ITSM and  its role within the business.

However,  some significant changes can be found in the refreshed version. Perhaps the first, most obvious change is that ITIL V3 divides the materials into three distinct components:

• Five core books,  presenting  the basic building blocks of ITSM, based  around  a service lifecycle approach
• Complementary materials,  published  to meet specific scenarios  or examples,  such as ”how to implement IT service management in an outsourced environment” or “how to use Six Sigma to implement IT service management,” with some of these materials being Web-based, so that they can be published  more rapidly and  keep ITIL V3 up-to-date with new developments
• Value-added products, such as templates and workflow diagrams
This new structure is intended  to prolong  the life of ITIL V3 while also providing  more specific guidance to ITIL users for specific situations.

Other  evolutionary  changes are designed to smooth integration with existing service management operations, while placing  greater emphasis on operational efficiency. For example:

• ITIL V3 offers guidance on how to comply with current legislation  and  regulations such as Sarbanes-Oxley and  Basel II, as well as formal governance models.
• Industry- and  topic-specific guidance includes implementation templates  for addressing special concerns  of specific vertical markets and industries.
• New  topics include service management strategies for outsourcing, co-sourcing and shared services models.
• A greatly expanded, state-of-the-art service management knowledge system captures current practice  and  aids proactive  service management.
ITIL V3 positioning

Sharpening the focus on the service lifecycle
The first two ITIL versions grouped  content according to process.  The idea  was that if ITIL defined the
processes, IT managers would define how to organize and  implement them to achieve  higher quality services and  reduce  costs.

Over the past five or more years,  that view has shifted and  matured.  It is now clear that ITIL processes cannot just be implemented  in isolation. IT is an increasingly strategic part of the organization—and managing IT is not just about implementing the processes  and  one function. It is about understanding and  meeting business needs through the provisioning  of IT services at every stage of their lifecycle, encompassing everything from strategy to daily operations.

With this new view of IT and  ITSM in mind, ITIL V3 is structured according to the stages of the service lifecycle and  the business outcomes they support. The processes  from ITIL V2 are still there—but this time ITIL shows exactly how these processes  are used to provide services that support the business, as well as how they are implemented  and  managed.

In ITIL V3, the five principal  stages of the service lifecycle are defined as:

• Service Strategy for practical  decision-making:  This is where the role and  requirements  of IT are defined to ensure overall business success.
• Service Design with a pragmatic service blueprint:  IT will design services that meet the business needs—  both through functionality and performance—and also design them to be manageable and  cost effective.
• Service Transition to improve management change, mitigate risk and  assure quality:  Services will be tested and  introduced into the infrastructure in a controlled manner.  Transition also ensures that IT is able to respond to changes in both the business and IT environments, resulting in a more agile,  responsive  organization.
• Service Operation for more responsive, stable services:   This is where the services are actually delivered  and  supported.  Operation achieves  a

designed, and  responding to variations in the business and  IT environments to achieve  stability and flexibility.
• Continual Service Improvement with measurements that work:  This involves the ongoing  monitoring measurement  of the quality and  cost of services

ITIL V3: New structure focuses on the service lifecycle