Value is created through two components:
Functionality offered by a product or service to meet a particular need. Utility is often
summarised as ‘what it does’.
A promise or guarantee that a product or service will meet its agreed requirements.
Neither utility nor warranty can deliver full value on its own. A product or service
may do exactly what the customer requires, but if it performs poorly, or is unavailable,
insecure or unreliable, it cannot deliver maximum value. Conversely,
a service will not deliver value if it does not provide the functionality needed, even though it may be highly available, reliable and secure and offer high levels of performance.
Example of Utility vs Warranty:
When ATMs were introduced, they removed the time constraint of customers being able to withdraw cash from their account only when the bank branch was open. Since their introduction, further functionality has been added (account balances, mini statements, bill payment etc.). These are all aspects of utility, but they are of course useless unless ATMs are sited in convenient locations, are kept topped up with cash and printer paper, have secure access controls and are reliable. Internet banking offered new utility through additional functions (e.g. transfers and online account creation) as well as allowing the customer to do all these anytime, anywhere. Different security, capacity and availability aspects are required in order to ensure the functionality is provided.
Service providers create value through using their assets in the form of resources (tangible) and capabilities (intangible).
A generic term that includes IT infrastructure, people, money or anything else that
might help to deliver an IT service. Resources are considered to be assets of an
The ability of an organisation, person, process, application, configuration item or IT
service to carry out an activity. Capabilities are intangible assets of an organisation.
The key difference between resource assets and capability assets is that, typically,
resources can be purchased in the marketplace while distinctive capabilities can
only be developed over time. Capabilities reflect the knowledge and experience of
the organisation and are used to transform physical resources into services. The
distinctive capabilities of a service provider, often quite intangible, set it apart from
its competitors, and enable it to attract and retain customers by offering unique
Refference: Brewster, E., Griffiths, R., Lawes, A., & Sansbury, J. (2012). IT Service Management: A Guide for ITIL Foundation Exam Candidates, 2nd Edition