Value Chain Patterns
Why value chain patterns matter
Organizations make strategic choices about which lifecycle activities to perform internally versus delegating to partners. These choices form a "value chain pattern" that determines which practices are needed, how teams are structured, required skills, critical supplier relationships, and governance focus areas.
The ITIL v5 Foundation book identifies six common patterns across two categories:
| Category | Patterns | Focus |
|---|---|---|
| Internal IT organizations | Internal Product Vendor, Internal Service Delivery, Service Integrator | IT serving its own organization |
| Commercial providers | Digital Product Vendor, Custom Software Developer, Managed Service Provider | IT serving external customers |
Internal IT organization patterns
Pattern 1: Internal Product Vendor
Purpose: "To develop and manage digital products for the company"
This pattern applies when internal IT builds and runs custom software for the business.
| Lifecycle Activity | Responsibility | Detail |
|---|---|---|
| Discover | Business + Technology jointly | Technology teams participate in identifying opportunities and defining requirements |
| Design | Technology teams (lead) | Product teams design solutions, engaging business stakeholders for validation |
| Acquire | Technology teams | Procure and allocate resources (cloud infrastructure, licenses, staff) |
| Build | Technology teams | Build, integrate, and test solutions; business may participate in UAT |
| Transition | Technology teams | Deploy to live environments; ensure operational readiness |
| Operate | Technology teams | Ensure safe and reliable operations; may use external cloud providers |
| Deliver | Technology + Business | Technology delivers the service; business defines and monitors service levels |
| Support | Technology teams | User support and incident management; feedback loop to Discover |
When to use: Organizations with strong engineering capability that build custom digital products (internal platforms, business-specific applications).
Key practices: Software and Development Management, Architecture Management, Deployment Management, Release Management, Service Configuration Management.
Pattern 2: Internal Service Delivery
Purpose: "To ensure efficient and reliable delivery of IT services based on third-party products"
This pattern is common when IT acquires products from external vendors and focuses on delivering and supporting services based on those products.
| Lifecycle Activity | Responsibility | Detail |
|---|---|---|
| Discover | Business (lead) | Business leaders identify needs; technology is consulted |
| Design | External vendor (lead) | Vendors design the product; internal teams ensure operational fit |
| Acquire | External vendor + Internal | Vendors manage product resources; internal teams manage operational resources |
| Build | External vendor | Vendors build the product; invisible to internal teams |
| Transition | Internal teams (lead) | Internal teams integrate products into the live environment |
| Operate | Internal teams | Internal teams operate products in the live environment |
| Deliver | Internal teams | Internal teams deliver services and manage SLAs |
| Support | Internal teams | Internal teams provide user support; vendors provide L3/expert support |
When to use: Organizations that primarily use commercial off-the-shelf (COTS) software and cloud platforms (SaaS, PaaS).
Key practices: Supplier Management, Service Level Management, Incident Management, Problem Management, Service Desk.
Pattern 3: Service Integrator
Purpose: "To coordinate multiple external vendors and managed service providers to deliver integrated services"
| Lifecycle Activity | Responsibility | Detail |
|---|---|---|
| Discover | Business (lead) | Business defines needs; technology and consultants advise |
| Design through Operate | External vendors, integrators, and MSPs | Third parties perform most lifecycle activities |
| Deliver | External + Internal | Third parties may deliver; internal teams remain accountable for quality |
| Support | External + Internal | Third parties provide support; internal teams ensure overall quality |
When to use: Organizations that outsource most IT operations and focus on governance, vendor management, and service integration.
Key practices: Supplier Management, Relationship Management, Service Level Management, Portfolio Management, Financial Management.
Governance risk: When adopting the service integrator pattern, internal teams shift from "doing" to "governing." This requires different skills (contract management, vendor governance, service integration) and a strong governance framework. The guiding principle "Think and work holistically" is critical to prevent fragmented service delivery.
Commercial provider patterns
Pattern 4: Digital Product Vendor
Purpose: "To provide digital products to individual users and businesses"
Organizations that build and ship digital products (apps, platforms, SaaS products) to external customers.
| Lifecycle Activity | Responsibility | Detail |
|---|---|---|
| Discover | Product teams | Continually review market, technology, performance, and user feedback |
| Design | Product teams | Design new features and products; users involved in prototype testing |
| Build | Product teams | Build and test components; may involve other teams or contractors |
| Transition | Product teams (automated) | Highly automated CI/CD deployment to live environments |
| Operate | Product teams or SRE/Ops | Product teams remain accountable; may delegate to SRE or cloud provider |
| Deliver | Minimal/automated | Mass market products require no delivery actions; access is self-service |
| Support | Product teams + self-service | Self-service support (knowledge base, community); product teams handle escalations |
When to use: Software companies, SaaS providers, digital platform businesses.
Key practices: Software and Development Management, Monitoring and Event Management, Deployment Management, Service Design.
Pattern 5: Custom Software Developer
Purpose: "To develop and ship software to meet specific customer requirements"
| Lifecycle Activity | Responsibility | Detail |
|---|---|---|
| Discover | Customer (lead) or joint | Vendor may help identify needs, but customer is responsible |
| Design | Vendor (lead) | Vendor designs solutions involving customer representatives |
| Build | Vendor | Vendor builds and tests; customer may participate in testing |
| Transition | Vendor + Customer | Collaborative deployment, especially when hosted by the customer |
| Operate | Customer or third party | Customer typically operates the product after delivery |
| Deliver | Customer | Customer delivers services based on the vendor's product |
| Support | Customer + Vendor (L3) | Customer handles routine support; vendor provides expert support |
When to use: Consulting firms, system integrators, custom development agencies.
Key practices: Project Management, Relationship Management, Service Validation and Testing, Knowledge Management.
Pattern 6: Managed Service Provider (MSP)
Purpose: "To operate, support, and deliver IT services on behalf of client organizations"
| Lifecycle Activity | Responsibility | Detail |
|---|---|---|
| Discover and Design | Client organization | Client defines what they need |
| Operate | MSP | MSP operates the infrastructure and platforms |
| Deliver | MSP | MSP delivers services per agreed SLAs |
| Support | MSP | MSP provides user support and incident management |
When to use: Organizations that outsource day-to-day IT operations while retaining strategic control.
Key practices: Service Level Management, Incident Management, Monitoring and Event Management, Service Desk, Availability Management.
Choosing your pattern
Most organizations use a combination of patterns across different services. The decision depends on:
| Factor | Internal Product Vendor | Internal Service Delivery | Service Integrator |
|---|---|---|---|
| Engineering capability | Strong | Limited | Minimal |
| Vendor dependency | Low | Medium | High |
| Governance complexity | Medium | Medium | High |
| Innovation speed | Fast | Depends on vendor | Depends on vendor |
| Cost structure | CapEx + OpEx | OpEx (subscription) | OpEx (managed) |
| Risk profile | Build risk (delays, quality) | Vendor risk (lock-in, outage) | Integration risk (coordination) |
ITIL v5 guidance: "The value chain patterns define the management practices required to enable digital product and service management activities. By identifying your patterns, you can focus on the practices that matter most and avoid investing in practices you do not need."
Related Pages
- Practices-Value Chain Mapping (how practices enable lifecycle activities)
- Product and Service Lifecycle (the 8 lifecycle activities)
- Operating Model Design (team structures)
- Supplier Management (vendor relationships)
- Decision Guides (interactive decision tools)