Home » Economics » ITIL and Economic Value

ITIL and Economic Value

I just completed ITIL foundations training.  I’ll let you all know later, when I find out, if I passed the test.  [Update: I did.]

What caught my attention most during training is that the ITIL library writers, in my opinion, correctly identified economic value as a combination of both (marginal) utility and warranty (irreversibility).  Somewhere along the line, I/T practitioners discovered what few economists (save for some, like Hernando de Soto Polar) bothered to factor into so many economic formulations: utility is fine, but if the economic actor fails to perceive that their utility is theirs to keep, then the sense of economic value falls.  While property rights (de Soto) alone do not economic value make, they are necessary prerequisites for any functioning economy.  In information technology a service like Google provides great utility, but if it were perceived as an unreliable service its overall economic value would drop through the floor.

Of course, the ITIL “utility + warranty” model is itself a little simplistic.   Max Neef breaks up utility further:

  • affection
  • creation
  • freedom
  • identity
  • leisure
  • participation
  • protection (security, warranty)
  • subsistence
  • understanding

Max Neef provides a nice balance of qualities, certainly, but I feel that protection/security/warranty/irreversibility plays a very specific role in economic transactions because of the way our brains are built.  I believe it remains useful to break out qualities associated with irreversibility (security, protection, warranty) into a separate, analyzable category of study.  For me, ITIL’s “utility + warranty” description of economic value is a great model to use.

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