mibisystems

Value capture is introduced in this way:

"Value capture is an important notion for all types of service providers, internal and external."

It goes on to say that "Good business sense discourages stakeholders from making major investments in any organizational capability unless it demonstrates value capture.  Internal providers are encouraged to adopt this strategic perspective to continue as viable concerns within a business.  Cost recovery is necessary but not sufficient.  Profits or surpluses allow continued investments in service assets that have a direct impact on capabilities."

OK, that tells you what to do with it, but not what it is.  For that, we need to go outside the ITIL canon to business strategy.  (The reason we didn't learn this in IT class is that the concept comes from business school.)  In a 2001 article on value capture for the Harvard Business School , authors Rhonda Germany and Raman Muralidharan write about value capture as transforming inventions (value creation) into profits for a company.  Thomas Edison invented the phonograph (creating value and the whole recording industry) which he was able to use to generate profit for his company (value capture).

What does this mean in the context of IT services?  As we create new business services by using IT, we need to capture the profits for the company.  Service Strategy used the example of a wireless messaging service.  I like internet banking.  By allowing customers to bank online, we make banking easier for customers.  Do they deposit more money in our bank because of it?  Do we save money on teller labor?  Do we gain more customers?  If we can quantify any of these benefits, we have proven value capture, and it's that extra income above the cost of the service that we can use to expand the business or do whatever else we do with net income.