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Whether services are being provided by an internal unit of the organization or contracted to an external agency, all services should be driven solely by business needs and judged by the value that they provide to the organization. Decision-making therefore rests with the business. Within this context, services must also reflect the defined strategies and policies of the service provider organization, which is particularly significant for external providers.

The Service Lifecycle is initiated from a change in requirements at the business level. These new or changed requirements are identified and agreed at the Service Strategy stage and documented. Each of these 'packages' will have an associated defined set of business outcomes.

The package is passed to the Service Design stage where a service solution is produced, defining everything necessary to take this service through the remaining stages of the lifecycle. Solutions may be developed internally or consist of bought in components that are integrated internally.

The design definition is passed to the Service Transition stage, where the service is built, evaluated, tested and validated, and transitioned into the live environment, where it enters the live Service Operation stage. The transition phase is also responsible for supporting the service in its early life and the phasing out of any services that are no longer required.

Service Operation focuses on providing effective and efficient operational services to deliver the required business outcomes and value to the customer. This is where any value is actually delivered and measured.

Continual Service Improvement identifies opportunities for improvement (which may arise anywhere within any of the lifecycle stages) based on measurement and reporting of the efficiency, effectiveness, cost-effectiveness and compliance of the services themselves, the technology that is in use and the Service Management processes used to manage these components. Although the measurements are taken during the operational phase, improvements may be identified for any phase of the lifecycle.

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