8. Designing & Managing Service Processes

7/30/2019 8. Designing & Managing Service Processes

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DESIGNING & MANAGING

SERVICE PROCESSESDIMPLE UDANI


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Blueprinting Services to

Create Valued Experiences and

Productive Operations


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Developing a Blueprint

Identify key activities in creating anddelivering service

Define big picture before drilling down toobtain a higher level of detail

Distinguish between front stage andbackstage

Clarify interactions between customers andstaff, and support by backstage activities andsystems

Identify potential fail points; take preventivemeasures; prepare contingency

Develop standards for execution of each

activity times for task completion,maximum wait times, and scripts to guide


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Key Components of a Service

Blueprint

1. Define standards for front-stage activities

2. Specify physical evidence

3. Identify principal customer actions

4. Line of interaction (customers and front-stagepersonnel)

5. Front-stage actions by customer-contact personnel

6. Line of visibility (between front stage and

backstage)7. Backstage actions by customer contact personnel

8. Support processes involving other servicepersonnel

9. Support processes involving IT

- Identify fail points and risks of excessive waits

- Set service standards and do failure-proofing


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OTSU Opportunity to Screw

Up Consists of fail points and waiting

times

Fail points result in failure to accessthe core service product

Waiting times are the possibilities of

delays between specific actions

requiring the customer to wait


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Improving Reliability by Failure

Proofing

Analysis reveals opportunities for failureproofing

Need fail-safe methods for both employees

and customers

Errors include treatment errors and tangibleerrors

Goal of fail-safe procedures is to preventerrors such as: Performing tasks incorrectly, in the wrong order,

too slowly


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Setting Service Standards

Design high standards for each step to satisfy and delight

Time parameters, correct performance, prescriptions for style

and demeanor

First impressions affects customers evaluations of quality during

later stages of service delivery

Customer perceptions of service experiences tend to be cumulative

For low-contact service, a single failure committed front stage is

relatively more serious than in high-contact service


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Redesigning Service Processes


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Mitchell T. Rabkin MD,

formerly president ofBostons Beth Israel Hospital

Institutions are like steel beamsthey tend to rust.What was once smooth and shiny and nicetends to become rusty.


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Why Redesign?

Revitalizes process that has become outdated

Changes in external environment make existingpractices obsolete and require redesign ofunderlying processes

Rusting occurs internally

Opportunities exist to achieve a quantum leap inproductivity and service quality

Key Measurements

1. Reduce service failures

2. Reduce cycle time

3. Enhance productivity

4. Increase customer satisfaction


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Approaches and Potential

Benefits

Service process redesign encompassesreconstitution, rearrangement, or

substitution of service processes as

categorized below: Eliminating non-value-adding steps

Delivering direct service

Shifting to self-service Bundling services

Redesigning the physical aspects of

service processes


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The Customer as Co-Producer


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Levels of Customer

Participation

Customer participation is the actions andresources supplied by customers during

service production and/or delivery Three Levels

LowEmployees and systems do all the work

MediumCustomer inputs required to assistprovider

HighCustomer works actively with provider

to co-produce the service


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Self-Service Technologies

(SSTs)

Customers undertake specific activitiesusing facilities or systems provided byservice supplier Customers time and effort replace those of

employees

Challenge:

Getting customers to use new technology


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Self-Service Technologies

(SSTs) Information-based services lend

selves particularly well to SSTs Used in both supplementary services and

delivery of core product

Organizations seek to divert customersfrom employee contact to Internet-basedself-service

Economic trade-off between declining

cost of these self-service systems andrising cost of labour


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Customer Co-production Using

SSTs

Productivity gains and cost savings resultwhen customers take over work previouslyperformed by employees

Lower prices, reflecting lower costs, inducecustomer to use SSTs

Research shows that customers tend totake credit for successful outcomes, but not

blame for unsuccessful ones


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Customer Co-production Using

SSTs Critical to understand how consumers

decide between using an SST option versusrelying on a human provider

SSTs present both advantages and

disadvantages

Benefits: Time and cost savings, flexibility,convenience of location, greater controlover service delivery, and a higher

perceived level of customization Disadvantages: Anxiety and stress

experienced by customers who areuncomfortable with using them


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What Aspects of SSTs Please or

Annoy Customers?

People love SSTs when

SST machines are conveniently located andaccessible 24/7

Obtaining detailed information andcompleting transactions can be done fasterthan through face-to-face or telephonecontact


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What Aspects of SSTs Please or

Annoy Customers?

People hate SSTs when

SSTs failsystem is down, PINnumbers not accepted, etc

They forget passwords, fail to provideinformation as requested, simply hitwrong buttons

Key weakness of SSTs: Too fewincorporate service recoverysystems

Customers still forced to maketelephone calls or personal visits

Blame service provider for notproviding more user-friendly system


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HSBC: The worlds local bank

Source: Courtesy HSBC

Global site brought to customers local computer


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Putting SSTs to Test by

Asking a Few Simple Questions

Does the SST work reliably?

Firms must ensure that SSTs aredependable and user-friendly

Is the SST better than interpersonalalternatives?

Customers will stick to conventional

methods if SST doesnt create benefitsfor them

If it fails, what systems are in place torecover?

Always provide systems, structures, and


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Customers as Partial Employees

Customers influence productivity and qualityof service processes and outputs

Customers who are offered opportunities toparticipate at active level are more likely to be

satisfied


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Customers as Partial

Employees However, customers cause one-third of all

service problems

Difficult to recover from instances ofcustomer failure

Focus on preventing customer failure bycollecting data on problem occurrence,analyzing root causes, and establishingpreventive solutions


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Customers as Partial

Employees Managing customers as employees helps

to avoid customer failures

Conduct job analysis of customerspresent role in businesscompare

against role that firm would like customersto play

Educate customers on how they areexpected to perform and what skills are

needed Motivate customers by ensuring that they

will be rewarded if they perform well

Appraise customers performanceregularly


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Dysfunctional Customer Behaviour

Disrupts Service Process

Add i th Ch ll f


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Addressing the Challenge of

Jaycustomers

A customer who behaves in a thoughtless

or abusive fashion, causing problems for

the firm, its employees, and othercustomers

Add i th Ch ll f


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Addressing the Challenge of

Jaycustomers

No organization wants anongoing relationship with anabusive customer

Divergent views onjaycustomers

Six types:

The Thief

The Rule-Breaker

The Deadbeat The Belligerent

The Family Feuders

The Vandal


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Consequences of Dysfunctional

Customer Behavior

Consequences for staff working front stage

Abused employees may find their emotionsnegatively affected and/or suffer long-termpsychological damage

Productivity and quality may suffer


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Customer Behavior

Consequences for customers can be bothnegative and positive

Exposure to unpleasant incidents canspoil consumption experience; Badbehaviour can be contagious

But customers may rally to support ofabused employee


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Customer Behavior

Consequences for organization

Unmotivated employees may work less

effectivelyAbused employees may take medical

leave

Direct financial costs of restoring

damaged property, legal fees, payingfraudulent claims


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THANK YOUDIMPLE UDANI

8. Designing & Managing Service Processes

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