The second step is to conduct an objective current-state assessment of existing services and service management practices. This should include consideration of the users' perception of the value being received, along with a review of people's competencies and skills, the processes and procedures involved, the capabilities of the available technological solutions and the prevailing organizational culture. The success of an improvement initiative depends on a clear and accurate understanding of the starting point and the required impact of the initiative.
For example, an organization can measure the current net promoter score (NPS) from a customer satisfaction survey, conduct a benchmark survey against its competitors or review findings of operational statistics or audit reports to understand its current state. If this step is skipped, the current state will not be understood and there will not be an objective baseline measurement against which improvement can be measured.
https://www.bmc.com/blogs/itil-continual-improvement/

Explanation
This includes the information and technology needed to deliver services (servers, storage, networks, databases, etc.) as well as the information and technology needed to manage those services (ITSM tools, knowledge bases, configuration information, etc.).
https://www.sysaid.com/blog/entry/everything-you-officially-need-to-know-about-itil-4