Service Quality and the Information Technology value add
By: Amit Bhushan Date: 6th May, 2014
Most of the commercial business activity of yore was about manufacturing of physical products and the age was called industrial age. However the new era belongs to services and logic seems to have changed a bit with the rationale- that though you buy a ‘sofa’ but you consume comfort and prestige or you buy car but consume transportation; and therefore if someone delivers the consumed item i.e. transportation in the car example, a necessary value add is delivered and therefore the logic of services. The whole gamut of corporates and SMEs has evolved around services and the contribution of service enterprises to the commercial output of the world exceeds the output derived out of manufacturing entities.
Service is different from manufactured products as its value lies in the experience as perceived by the customer which is unlike product where comparisons basis engineering specs are the order of the day. However, since a large number of consumers have nearly same basic needs and expectations about some of the services from any company and this expectation is largely same from all entities in the market; so large corporates with capability to mass produce these services have spawned to deliver these generic services to consumers. So we have large entities in banking, insurance, leasing, telecom, retailing, wholesale/industrial trade & sourcing, media & entertainment etc. We have areas where government entities dominate such as education, healthcare, sanitation and private entities are confined to smaller SME sort of roles in these sectors as there impact is localized or limited. We also have areas where government and private sector collaborate and a mix of large and small entities operate in the sector such as Telecom, public and goods transportation etc. for example Railways or Bus transportation, shipping, airlines.
For production and delivery of services, corporates and increasingly SMEs, lay down a set of processes which the staff needs to follow to fulfill the needs of customer in an ‘acceptable’ way. This breakup of service into a set of well defined processes is done to maintain the ‘service quality’ and maintain a set of standards which leads to brand building/positioning in customer’s perception and therefore repeat orders and growth for the corporate. This also helps in streamlining service delivery as per customer’s expectation from it in a market.
To cut the cost of production of services, corporates try to centralize production to the extent possible and adopt assembly line production techniques to squeeze maximum productivity out of staff, equipment and associated infrastructure. The staff is segregated into a set of specialized roles which need to be performed in defined order one after another to delivered the required set of services to customers. The service is produced as each role performs its value add on the required input as production moves along the service line. The line with is normally capable to produce multiple variation of defined services as per customer’s needs. Further the customer’s are segmented in groups to identify the commonality of consumed services and meet service expectation of the segment.
Information Technology is increasingly playing a critical role in service production and delivery in terms of defining the assembly lines and the roles to be performed by users for producing and delivery of services. This helps clearly lay down input criteria and processing steps there-under for production and delivery of the requisite services. Information technology also plays key roles in management of enterprises as well since this also is being streamlined in the service organizations as in case of manufacturing organizations. Increasingly, decision support application and tools are being adopted even by SMEs for producing management and customer services. The Financial organizations are increasingly expecting well laid out processed from borrowing organizations with transparent reporting on production/project numbers (operational as well as financial) as a criteria to make funds available at low cost to corporates.
A lot of service organizations are structured along the same lines with nearly same service product definitions. Management processes across organizations are also largely similar. The Information Technology support required is therefore similar and also increasingly being productized so that it’s cost of development can be shared by entities to the extent possible. The IT product also supports entities ‘acquire’ capabilities other than those that they already have, provided the IT product organization has a well entrenched product which is capable of producing multiple services in its space as needed by different set of customers.
As the service organization tries to evolve further and move closer to consumers in terms of meeting their requirements taking input and providing output in the language understandable by consumers, we are likely to witness a greater need for products to be in sync with the markets to meet needs of those services by lowest strata of consumers. The IT organization will also need to groom itself up to offering support to production of services and management support by such people who until now were cut off from the value chain that were design to focus on the well heeled strata of society. Innovative ways are being found to meet the needs and reach out to people who are left out and consume sparingly due to affordability factor. A lot of adaptability to local conditions is also being explored including areas where local regulatory requirements need to be complied with by the service entity.
By: Amit Bhushan Date: 6th May, 2014
Most of the commercial business activity of yore was about manufacturing of physical products and the age was called industrial age. However the new era belongs to services and logic seems to have changed a bit with the rationale- that though you buy a ‘sofa’ but you consume comfort and prestige or you buy car but consume transportation; and therefore if someone delivers the consumed item i.e. transportation in the car example, a necessary value add is delivered and therefore the logic of services. The whole gamut of corporates and SMEs has evolved around services and the contribution of service enterprises to the commercial output of the world exceeds the output derived out of manufacturing entities.
Service is different from manufactured products as its value lies in the experience as perceived by the customer which is unlike product where comparisons basis engineering specs are the order of the day. However, since a large number of consumers have nearly same basic needs and expectations about some of the services from any company and this expectation is largely same from all entities in the market; so large corporates with capability to mass produce these services have spawned to deliver these generic services to consumers. So we have large entities in banking, insurance, leasing, telecom, retailing, wholesale/industrial trade & sourcing, media & entertainment etc. We have areas where government entities dominate such as education, healthcare, sanitation and private entities are confined to smaller SME sort of roles in these sectors as there impact is localized or limited. We also have areas where government and private sector collaborate and a mix of large and small entities operate in the sector such as Telecom, public and goods transportation etc. for example Railways or Bus transportation, shipping, airlines.
For production and delivery of services, corporates and increasingly SMEs, lay down a set of processes which the staff needs to follow to fulfill the needs of customer in an ‘acceptable’ way. This breakup of service into a set of well defined processes is done to maintain the ‘service quality’ and maintain a set of standards which leads to brand building/positioning in customer’s perception and therefore repeat orders and growth for the corporate. This also helps in streamlining service delivery as per customer’s expectation from it in a market.
To cut the cost of production of services, corporates try to centralize production to the extent possible and adopt assembly line production techniques to squeeze maximum productivity out of staff, equipment and associated infrastructure. The staff is segregated into a set of specialized roles which need to be performed in defined order one after another to delivered the required set of services to customers. The service is produced as each role performs its value add on the required input as production moves along the service line. The line with is normally capable to produce multiple variation of defined services as per customer’s needs. Further the customer’s are segmented in groups to identify the commonality of consumed services and meet service expectation of the segment.
Information Technology is increasingly playing a critical role in service production and delivery in terms of defining the assembly lines and the roles to be performed by users for producing and delivery of services. This helps clearly lay down input criteria and processing steps there-under for production and delivery of the requisite services. Information technology also plays key roles in management of enterprises as well since this also is being streamlined in the service organizations as in case of manufacturing organizations. Increasingly, decision support application and tools are being adopted even by SMEs for producing management and customer services. The Financial organizations are increasingly expecting well laid out processed from borrowing organizations with transparent reporting on production/project numbers (operational as well as financial) as a criteria to make funds available at low cost to corporates.
A lot of service organizations are structured along the same lines with nearly same service product definitions. Management processes across organizations are also largely similar. The Information Technology support required is therefore similar and also increasingly being productized so that it’s cost of development can be shared by entities to the extent possible. The IT product also supports entities ‘acquire’ capabilities other than those that they already have, provided the IT product organization has a well entrenched product which is capable of producing multiple services in its space as needed by different set of customers.
As the service organization tries to evolve further and move closer to consumers in terms of meeting their requirements taking input and providing output in the language understandable by consumers, we are likely to witness a greater need for products to be in sync with the markets to meet needs of those services by lowest strata of consumers. The IT organization will also need to groom itself up to offering support to production of services and management support by such people who until now were cut off from the value chain that were design to focus on the well heeled strata of society. Innovative ways are being found to meet the needs and reach out to people who are left out and consume sparingly due to affordability factor. A lot of adaptability to local conditions is also being explored including areas where local regulatory requirements need to be complied with by the service entity.