4 -delivering_services

Alex Hill and Terry Hill

Delivering servicesAlex Hill and Terry Hill

Learning objectives

• Recognise the TECHNICAL and BUSINESS requirements to be met when delivering services

• Understand the CHARACTERISTICS of service operations

• Identify the CATEGORIES of service and TYPES of service delivery system

• Explain how to DESIGN service delivery systems

• Understand how IT impacts service delivery

Lecture outline

• INTRODUCTION

• Factors affecting SERVICE DELIVERY design

• DESIGNING the service delivery system

• Critical REFLECTIONS

• SUMMARY

Factors affecting service delivery system design

•NUMBER OF STEPS

- Single- Multiple

SERVICE COMPLEXITY

•TECHNICAL requirements

- The service itself•BUSINESS

requirements- Volumes- Order-winners &

qualifiers

THEMARKET

> KEY IDEA

As services differ, so will the DESIGNS of their delivery systems

Characteristics of service operations

•MIX of services and products•INTANGIBLE nature•SIMULTANEOUS provision and

consumption•TIME-DEPENDENT capacity•CUSTOMERS can help deliver the

service•Need to MANAGE CUSTOMERS•No PATENTS

> KEY IDEAServices are PROVIDED and CONSUMED at the same time. They CANNOT be stored

CASE 4.1

TIPPING AS A MEASURE OF CUSTOMER SERVICE

1.What makes up the total SERVICE OFFERING for a customer during an evening meal at a restaurant?

2.How could a HAIRDRESSER use these customer management approaches?

CASE 4.1

Question Answer

Service offering

Hairdresser

TIPPING AS A MEASURE OF CUSTOMER SERVICE

• EXPLICIT benefits- DINING experience- FOOD- DRINK• IMPLICIT benefits- PERSONALISED service- SPEED of service- GOODWILL gestures

• Adopt similar approach to delivering IMPLICIT benefits

Understanding how services differ

•Level of TECHNOLOGY used•NATURE of service being delivered- Complexity of service- What is being processed•TYPE of service being delivered- Professional, Service shop or Mass

service•BUSINESS requirements- Volumes- Order-winners and qualifiers

KEY DIFFERENCES

> KEY IDEA

The delivery system processesCUSTOMERS, CUSTOMER SURROGATES, PRODUCTS, INFORMATIONor some COMBINATION of these

Designing the service delivery system

1.Understand MARKET volumes, order-winners and qualifiers

2.Identify the service ENCOUNTER and EXPERIENCE to be delivered

3.Understand how to RETAIN customers

Overall design

Designing the service delivery systemOverall design

•BACK OFFICE activities•FRONT OFFICE

activities

CUSTOMER INTERFACE

Service delivery

CASE 4.2 IMPROVING SERVICE DELIVERY

THROUGH FRONT AND BACK OFFICE

CASE 4.2

Question Bank Electrical repair

Advantages

Disadvantages

• Higher EFFICIENCY- More activities in back office- Queues manage high

demand • Higher delivery SPEED- Less activities in front office• Higher delivery

RELIABILITY- Narrow range of activities in

front office

IMPROVING SERVICE DELIVERY THROUGH FRONT AND BACK OFFICE

• Higher WAIT- Queues manage high

demand • Less CUSTOMISATION- Customers receive standard

service

• Higher CUSTOMISATION- Service tailored to customer

requirements

• Lower EFFICIENCY- More activities in front office• Lower delivery SPEED- More activities in front office• Lower delivery

RELIABILITY- Wider range of activities in

front office

•No CUSTOMER CONTACT•Easier SCHEDULING•Higher processing VOLUMES

BACK OFFICEService delivery

Line of

visibility FRONT OFFICE•FACILITIES represent

organisation•Easier to manage QUEUE

lengths•Involve CUSTOMERS in

delivery•Wider STAFF ROLES

•BACK OFFICE activities•FRONT OFFICE

activities

CUSTOMER INTERFACE

DELIVERY SYSTEM

•Number of STEPS- Single vs Multiple•TYPE of delivery

system- Non-repeat vs Repeat- Low volume vs high

volume

Service delivery

CASE 4.3

SERVICE DELIVERY AT THE MOSCOW SCIENTIFIC INSTITUTE FOR EYE MICROSURGERY

1.What are the ADVANTAGES of this approach?

2.What are the DISADVANTAGES of this approach?

Question Answer

Advantages

Disadvantages

CASE 4.3 SERVICE DELIVERY AT THE MOSCOW

SCIENTIFIC INSTITUTE

• Higher EFFICIENCY- Automated processes- Lower labour skill and cost• Higher delivery VOLUME- More operations can be completed

• Less CUSTOMISATION- Customers receive standard service• Less FLEXIBILITY- Delivers standard service- Significant investment required to increase

volume

Designing the service delivery systemService delivery

Designing the service delivery systemOther factors

•ENHANCING services•Use of IT in service delivery•CUSTOMER participation in service

delivery

Designing the service delivery systemOther factors

CASE 4.4

SERVICE DELIVERY AT A LOCAL HIGH STREET BANK BRANCH

1.What are the key ADVANTAGES and DISADVANTAGES of the bank’s approach?

2.What are the key ADVANTAGES and DISADVANTAGES of the post office’s approach?

Question Bank Post office

Advantages

Disadvantages

• Higher EFFICIENCY- Higher utilisation of staff

skills • Higher delivery SPEED- For each individual service• Higher delivery

RELIABILITY- Narrow range of activities in

each delivery system

• Lower delivery SPEED- If want more than one

service • Less CUSTOMISATION- Each service delivered

separately

• Higher delivery SPEED- If want more than one

service• Higher CUSTOMISATION- Service tailored to customer

requirements

• Lower EFFICIENCY- Skill must be more skilled• Lower delivery SPEED- If want more than one

service• Lower delivery

RELIABILITY- Wider range of activities

being delivered

CASE 4.4 SERVICE DELIVERY AT A LOCAL HIGH

STREET BANK BRANCH

CASE 4.5

PROVIDING PERSONAL SERVICE ONLINE AT GARDEN ESCAPE

1.What are the ADVANTAGES of shopping online?

2.What are the DISADVANTAGES of shopping online?

Question Answer

Advantages

Disadvantages

• For CUSTOMERS- Check PURCHASE HISTORY- Check TECHNICAL DETAILS on plants- Get answers to GENERAL QUERIES• For GARDEN CENTRE- Reduces STAFF COSTS- Allows customers to CUSTOMISE the service- Helps build and manage customer RELATIONSHIP

CASE 4.5 PROVIDING PERSONAL SERVICE

ONLINE AT GARDEN ESCAPE

• For CUSTOMERS- May get INCORRECT ADVICE if ask wrong question• For GARDEN CENTRE- Customer can easily COMPARE PRICES with

competitors- Customers can use services and then BUY

ELSEWHERE

CASE 4.6

SELF-SCANNING IN SUPERMARKETS

1.Why are supermarkets INTRODUCING self-checkout systems?

2.Why do CUSTOMERS like these systems?

CASE 4.6

Question Answer

SUPERMARKET advantages

CUSTOMER advantages

SELF-SCANNING IN SUPERMARKETS

• Higher EFFICIENCY- Lower staff costs as need less • Easier to manage CAPACITY- Customers serve themselves

• Higher delivery SPEED- Customers don’t have to wait • EASE of use- Simple and easy to use• Higher CUSTOMISATION- Customers serve themselves

Insurance companyHospital

Delivering servicesDifferent approaches to serving customers

The Hospital(1971)

The Incredibles

(2004)

Film clip Hospital

FilmTitleDirector (year)

The HospitalArthur Hiller (1971)

ClipStartFinish

00:23:1500:26:36

What clip shows How customers are served in a hospital

Key learning objective

The different skills required in the back office and front office functionsThe impact of a breakdown in communication between front office and back office

Film clip Insurance company

FilmTitleDirector (year)

The IncrediblesBrad Bird (2004)

ClipStartFinish

00:11:3400:13:31

What clip showsHow customers are served in an insurance company

Key learning objective

The different skills required in the back office and front office functionsThe impact of always putting the customer’s needs first within a business

Question Answer

SALLY’S approach

BOB’S approach

POINTS highlighted

• BACK OFFICE function - has to come to front office if not getting necessary information

• INTERNALLY FOCUSED on processes - blue cross number

• NOT customer focused

• FRONT OFFICE function• Highly CUSTOMER FOCUSED - almost too much• NOT internally focused

• Require DIFFERENT SKILLS in back and front office• Need to BALANCE customer and internal business

Critical reflections

• Service DELIVERY SYSTEMS must be:- ALIGNED to its market ORDER-WINNERS and

QUALIFIERS- REFLECT its internal BUSINESS requirements- INCORPORATE IT and other DEVELOPMENT

opportunities

• Customers become MORE PROFITABLE the longer you RETAIN them

Critical reflections

Summary• Services have distinctive

CHARACTERISTICS- Intangible and perishable

• Service delivery systems must SUPPORT

- Technical and business requirements

• TECHNICAL requirements- The service specification

• BUSINESS requirements- Volumes and market order-winners and

qualifiers

Revision questions

1 The service delivery system design will reflect:a) The complexity of the service being

deliveredb) The business and technical requirements

that have to be metc) Both a) and b)

Revision questions

1 The service delivery system design will reflect:a) The complexity of the service being

deliveredb) The business and technical requirements

that have to be metc) Both a) and b)

Revision questions

2 Which of the following are distinctive characteristics of services :a) Produced and consumed separately, so its

possible to store themb) Customers do not form part of the

delivery systemc) Intangible in nature, so customers can’t

see, feel, inspect or test them before purchasing them

Revision questions

2 Which of the following are distinctive characteristics of services :a) Produced and consumed separately, so its

possible to store themb) Customers do not form part of the

delivery systemc) Intangible in nature, so customers can’t

see, feel, inspect or test them before purchasing them

Revision questions

3 An example of an automated service is:

a) Dry-cleaning

b) Cash dispensing

c) Word processing

Revision questions

3 An example of an automated service is:

a) Dry-cleaning

b) Cash dispensing

c) Word processing

Revision questions

4 The key dimensions that help classify services into professional services, service shops and mass services categories are:

a) Volume

b) Service variety

c) Both a) and b)

Revision questions

4 The key dimensions that help classify services into professional services, service shops and mass services categories are:

a) Volume

b) Service variety

c) Both a) and b)

Revision questions

5 The front office tasks are conducted:a) In the presence of and involving the

customerb) Away from and not involving the

customerc) Both a) and b)

Revision questions

5 The front office tasks are conducted:a) In the presence of and involving the

customerb) Away from and not involving the

customerc) Both a) and b)

Revision questions

6 An advantage of completing work in the back office is:

a) Processing volumes are lower

b) They are easier to schedule

c) The customer can process some of the activities

Revision questions

6 An advantage of completing work in the back office is:

a) Processing volumes are lower

b) They are easier to schedule

c) The customer can process some of the activities

Revision questions

7 Which of the following statements is true:a) Retention rates are higher for customers

having no problems during service delivery

b) Retention rates are higher for customers having problems that are solved during service delivery

c) Retention rates are not affected by whether a customer experiences a problem during service delivery

Revision questions

7 Which of the following statements is true:a) Retention rates are higher for customers

having no problems during service delivery

b) Retention rates are higher for customers having problems that are solved during service delivery

c) Retention rates are not affected by whether a customer experiences a problem during service delivery

CASE FOR TUTORIAL

BRITISH AIRWAYS CLUB WORLD

4 -delivering_services

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