DESIGNING AND MANAGING SERVICE PROCESS & MANAGING PEOPLE FOR SERVICE

ADVANTAGE

Report

Submitted by: Aneesh Mahajan (2654) Harshavardhan Tumma (2657) K Siva chandra lochan (2661) Suresh Kumar Sankoju (2631)

Submitted to: Dr. Nidhi Jain

Designing and Managing Service Processes

1. Flowcharting Service Delivery
Technique for displaying the nature and sequence of the different steps in delivery service to customers Offers way to understand total customer service experience Shows how nature of customer involvement with service organizations varies by type of service: o People processing o Possession processing o Mental Stimulus processing o Information processing Sample Flowchart:

2. Blueprinting Services to Create Valued Experiences and Productive Operations

Developing a Blueprint: Identify key activities in creating and delivering service Define big picture before drilling down to obtain a higher level of detail Advantages of Blueprinting: Distinguish between frontstage and backstage Clarify interactions between customers and staff, and support by backstage activities and systems Identify potential fail points; take preventive measures; prepare contingency Pinpoint stages in the process where customer commonly have to wait Key Components of a Service Blueprint: Define standards for front-stage activities Specify physical evidence Identify main customer actions Line of interaction (customers and front-stage personnel)

 Frontstage actions by customer-contact personnel Line of visibility (between front stage and backstage) Backstage actions by customer contact personnel Support processes involving other service personnel Support processes involving IT Example: The Restaurant Experience

Act 1: Introductory Scenes Act 2: Delivery of Core Product Cocktails, seating, order food and wine, wine service

 Potential fail points: Menu information complete? Menu intelligible? Everything on the menu actually available? Mistakes in transmitting information a common cause of quality failure e.g. bad handwriting; poor verbal communication Customers may not only evaluate quality of food and drink, but how promptly it is served, serving staff attitudes, or style of service Act 3: The Drama Concludes Remaining actions should move quickly and smoothly, with no surprises at the end Customer expectations: accurate, intelligible and prompt bill, payment handled politely, guests are thanked for their patronage Fail Proofing: Identify fail points Analysis of reasons for failure often reveals opportunities for failure proofing to reduce/eliminate future risk of errors Need fail-safe methods for both employees and customers Have poka-yokes to ensure service staff do things correctly, as requested, or at the right speed Customer poka-yokes focus on preparing the customer for: o The encounter o Understanding and anticipating their roles o Selecting the correct service or transaction

3. Service Process Redesign

Revitalizes process that has become outdated Changes in external environment make existing practices obsolete and require redesign of underlying processes o Creation of brand-new processes to stay relevant Rusting occurs internally o Natural deterioration of internal processes; creeping bureaucracy; evolution of spurious, unofficial standards

o Symptoms: Extensive information exchange Data that is not useful High ratio of checking or control activities to value-adding activities Increased exception processing Customer complaints about inconvenient and unnecessary procedures Process Redesign: Approaches and Potential Benefits Eliminating non-value-adding steps o Simplify front-end and back-end processes with goal of focusing on benefitproducing part of service encounter o Get rid of non-value adding steps o Improve productivity and customer satisfaction Shifting to self-service o Increase in productivity and service quality o Lower costs o Enhance technology reputation o Differentiates company Delivering direct service o Bring service to customers instead of bringing customers to service firm o Improve convenience for customers o Productivity can be improved if companies can eliminate expensive retail locations o Increase customer base Bundling services o Involves grouping multiple services into one offer, focusing on a well-defined customer group o Often has a better fit to the needs of target segment o Increase productivity o Add value for customers through lower transaction costs o Customize service

o Increase per capita service use Redesigning physical aspects of service processes o Focus on tangible elements of service process; include changes to facilities and equipment to improve service experience o Increase convenience o Enhance the satisfaction and productivity of frontline staff o Cultivate interest in customers o Differentiate company

4. The Customer as Co-Producer

Levels of Customer Participation: Low o Employees and systems do all the work o Often involves standardized service Medium o Customer inputs required to assist provider o Provide needed information and instructions o Make some personal effort; share physical possessions High o Customer works actively with provider to co-produce the service o Service cannot be created without customers active participation o Customer can jeopardize quality of service outcome (e.g., weight loss, marriage counseling)

5. Self-Service Technologies
Ultimate form of customer involvement o Customers undertake specific activities using facilities or systems provided by service supplier o Customers time and effort replace those of employees e.g. Internet-based services, ATMs, self-service gasoline pumps

Information-based services can easily be offered using SSTs

o Used in both supplementary services and delivery of core product e.g. eBay no human auctioneer needed between sellers and buyers

Many companies seek to encourage customers to serve themselves using Internetbased self-service o Challenge: getting customers to try this technology SSTs advantages o Time savings o Cost savings o Flexibility o Convenience of location o Greater control over service delivery o High perceived level of customization SSTs disadvantages o Anxiety and stress experienced by customers who are uncomfortable with using them o Some see service encounters as social experiences and prefer to deal with people People love SSTs when o SST machines are conveniently located and accessible 24/7often as close as nearest computer! o Obtaining detailed information and completing transactions can be done faster than through face-to-face or telephone contact o People in awe of what technology can do for them when it works well People hate SSTs when o SSTs fail system is down, PIN numbers not accepted, etc
o

Poorly designed technologies that make service processes difficult to understand and use

they mess up - forgetting passwords; failing to provide information as requested; simply hitting wrong buttons

6. Dysfunctional Customer Behavior

Jaycustomer: A customer who behaves in a thoughtless or abusive fashion, causing problems for the firm, its employees, and other customers Types of Jaycustomers: 1. The Thief: a. No intention of payingsets out to steal or pay less b. Services lend themselves to clever schemes to avoid payment 2. The Rule Breaker: a. Many services need to establish rules to guide customers safely through the service encounter b. Government agencies may impose regulations that service suppliers must enforce c. Some rules protect other customers from dangerous behavior 3. The Belligerent: a. Expresses resentment, abuses service employees verbally or even physically b. Confrontations between customers and service employees can easily escalate 4. Family Feuders: a. People who get into arguments with other customersoften members of their own family 5. The Vandal: a. Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture b. Bored and drunk young people are a common source of vandalism c. Unhappy customers who feel mistreated by service providers take revenge 6. The Deadbeat: a. Customers who fail to pay

Frontline Service Personnel: Source of Customer Loyalty and Competitive Advantage

Frontline is an important source of differentiation and competitive advantage. It is: a core part of the product the service firm the brand Frontline also drives customer loyalty, with employees playing key role in anticipating customer needs, customizing service delivery and building personalized relationships.

Frontline work is stressful Boundary Spanning Roles

Boundary spanners link the inside of the organization to the outside world. Multiplicity of roles often results in service staff having to pursue both operational and marketing goals. Consider management expectations of restaurant servers: deliver a highly satisfying dining experience to their customers be fast and efficient at executing operational task of serving customers do selling and cross selling, e.g. We have some nice desserts to follow your main course

Role Stress in the Frontline

Person vs. Role:Conflicts between what jobs require and employees own personality and beliefs Organization vs. Customer:Dilemma whether to follow company rules or to satisfy customer demands Customer vs. Customer: Conflicts between customers that demand service staff intervention

Emotional Labor
The act of expressing socially desired emotions during service transactions (Hochschild, The Managed Heart)

Performing emotional labor in response to societys or managements display rules can be stressful

Good HR practice emphasizes selective recruitment, training, counseling, strategies to alleviate stress

The Cycles of Failure, Mediocrity and Success

Too many managers make short-sighted assumptions about financial implications of: Low pay Low investment (recruitment, training) High turnover human resource strategies Often costs of short-sighted policies are ignored: Costs of constant recruiting, hiring & training Costs of disruptions to a service while a job remains unfilled Loss of departing persons knowledge of business and customers Cost of dissatisfied customers

Cycle of Failure

Cycle of Mediocrity

Cycle of Success

How to Manage People for Service Advantage

Staff performance is a function of both ability and motivation. How can we get able service employees who are motivated to productively deliver service excellence 1. Hire the right people 2. Enable your people 3. Motivate and energize your people

Recruitment
The right people are a firms most important asset: take a focused, marketing -like approach to recruitment Clarify what must be hired versus what can be taught Clarify nature of the working environment, corporate values and style, in addition to job specs Ensure candidates have/can obtain needed qualifications Evaluate candidates fit with firms culture and values Fit personalities, styles, energies to the appropriate jobs

Select And Hire the Right People: (1) Be the Preferred Employer Create a large pool: Compete for Talent Market Share
What determines a firms applicant pool? Positive image in the community as place to work Quality of its services The firms perceived status There is no perfect employee Different jobs are best filled by people with different skills, styles or personalities Hire candidates that fit firms core values and culture

 Focus on recruiting naturally warm personalities

(2) How to Identify the Best Candidates

Observe Behavior Hire based on observed behavior, not words you hear Best predictor of future behavior is past behavior Consider group hiring sessions where candidates given group tasks Personality Testing Willingness to treat co-workers and customers with courtesy, consideration and tact Perceptiveness regarding customer needs Ability to communicate accurately and pleasantly

How to Identify the Best Candidates

Employ Multiple, Structured Interviews Use structured interviews built around job requirements Use more than one interviewer to reduce similar to me effects Give Applicants a Realistic Preview of the Job Chance to have hands-on with the job Assess how the candidates respond to job realities Allow candidates to self select themselves out of the job

Train Service Employees

The Organizational Culture, Purpose and Strategy Promote core values, get emotional commitment to strategy Get managers to teach why, what and how of job. Interpersonal and Technical Skills Both are necessary but neither is sufficient for optimal job performance

Product/Service Knowledge Staffs product knowledge is a key aspect of service quality Staff need to be able to explain product features and to position products correctly

Factors Favoring Employee Empowerment

Firms strategy is based on competitive differentiation and on personalized, customized service Emphasis on long-term relationships vs. one-time transactions Use of complex and non-routine technologies Environment is unpredictable, contains surprises Managers are comfortable letting employees work independently for benefit of firm and customers

Employees seek to deepen skills, like working with others, and are good at group processes

Control vs. Involvement Model of Management

Information about operating results and measures of competitive performance Rewards based on organizational performance (e.g. profit sharing, stock ownership) Knowledge/skills enabling employees to understand and contribute to organizational performance Power to influence work procedures and organizational direction (e.g. quality circles, self-managing teams)

Motivate and Energize the Frontline Use the full range of available rewards effectively, including:
Job content Feedback and recognition Goal accomplishment

The Inverted Organizational Pyramid

The Wheel of Successful HR in Service Firms