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
Factors affecting service delivery system design
•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
Factors affecting service delivery system design
•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
Understanding how services differ
Factors affecting service delivery system design
Understanding how services differ
Factors affecting service delivery system design
Understanding how services differ
Factors affecting service delivery system design
> 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
Designing the service delivery systemOverall design
Designing the service delivery system
•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
Designing the service delivery system
•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
Designing the service delivery system
•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
Delivering servicesDifferent approaches to serving customers
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
Delivering servicesDifferent approaches to serving customers
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
Delivering servicesDifferent approaches to serving customers
• 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
needs
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
Critical reflections
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