With this guide we can then characterize -systematically- the service provider company and its component units, relating their objectives to the objectives of their clients.
Introduction
In recent decades - worldwide - the growth rate of service provision is much higher than that of industrial production. The same is true regarding the contribution to the PTB in developed and developing countries: in fact -in them- the percentage of costs originated by the provision of external and internal, direct and indirect services of any industrial product is much higher at 50%.
On the other hand, the increasing degree of technologization and automation of all kinds of activities has had such an impact on the provision of services that this - together with the violent spread of telematics, intranet and internet - has also begun to have an impact on the growing provision of services to and from homes, via outsorcing or other modalities: in developed countries, the impact this has, in turn, on the decrease in traditional secretarial support, the dimensions and potential of offices and shops, urban and intercity transport and energy consumption, etc., etc.
Our extensive and intense experience in consulting of industrial and service companies allows us to ensure that in general the management of service companies -that really satisfy their clients- is more complex: this complexity grows as the intangibility or the public or non-profit nature of the service provided. Conversely, the monopoly character decreases it.
Something similar happens with the two generic types of service: the services that clients require obligated by a third party, but that they do not necessarily want to have, and it bothers them to pay, are less complex to provide - to the real satisfaction of clients - than those services that customers feel they need and want, and are willing to pay: customers do not buy services, they pay to feel good, because a need is met, because a problem is solved… what then is the generic product sold and bought ?, are services provided or are needs met ?, what makes the difference? The perception and the feelings or the reality and the facts?
Here is a typical dilemma that -in the provision of services- is unavoidable, but that is not always addressed and much less resolved… or well resolved…
The above becomes more challenging as the user has increased his demands for quality and opportunity with increasing expectations of lower prices and a higher degree of satisfaction, in all kinds of services.
None of the above is foreign to Venezuela, because although to a lesser degree, everything related to services has grown - and although it has not always improved and in some cases worsened - the demands of national and foreign users are increasing: in fact, the opening up of oil is beginning to have a strong impact on the demand and supply of new and better services, via outsourcing, or other modalities. In fact, we cannot fail to consider in this regard what the configuration and capacity of PDV Servicios means at the national level.
Notwithstanding the foregoing -in Venezuela- the specific offer of education and training in relation to management of service companies has not increased or been updated, in proportion to the growing demand and provision of all kinds of services: it is frequent that in some Service-oriented management development activities use examples or elaborated cases for industrial companies, which the participant must "translate" to their sector of interest, which does not always make sense or is possible.
Strategic Management of Services
As we stated in another article on the subject, this is a discipline that is in fashion and that integrates a large number of new approaches that obsolete traditional strategic planning and management control.
We also proposed that the objective of strategic management is that the managers who practice it are more successful: understanding success as achieving high performance in management leading to compliance with the vision and mission of the organization in charge, in a given context. of values.
The strategic process involves both establishing what you want to achieve through the vision, mission, objectives and goals and formulating strategies to achieve them, due consideration of the scenarios - previously hypothesized - that could arise, and the resources -of different types- that would be necessary.
It is by crossing the results of an external scrutiny of the company (market opportunities and threats) with the results of an internal scrutiny (internal strengths and weaknesses) that we can generate, competitive positioning strategies, in line with both our competitive advantages. and core competencies as with those of our competitors: ambitious definition of our strategic purpose to win the preferred favor of customers.
It is part of the strategic process to align the expectations of shareholders, customers, workers and other stakeholders, together with seeing how to satisfy them through processes of excellence that generate value for all of them: this involves reinforcing, adjusting or changing structures, systems, symbols, values, people and competencies, reassigning -responsibly- the responsibilities and resources required for competitive, productive and profitable service provision.
It is also part of the process to make the protagonists and their allies -in front of opponents and indifferent- know, understand and share the strategic approach and commit themselves - with passion - in its implementation: this has more to do with leading emotions and Participants' feelings that with managing physical, technological and financial resources.
On the other hand, the strategic process includes continuously evaluating and regulating management, comparing results with goals, determining from the deviations the causes that generated them: the causes may derive from the actions carried out or not carried out, but they may also stem from inconsistencies. strategies attributable to the formulation of strategies or tactics, the visualization of scenarios, etc. or to an incorrect way of observing the world or the situation, attributable to the observer and his acting or not acting or his way of doing it (double-loop learning leading to actions of greater strategic adjustment, or of simple trial and error).
What is the difference?
One of the fundamental differences - from service delivery management to industrial production management - is the vastly greater degree of customer contact that the service provider has than the industrial producer.
The industrial producer reaches the final consumer of his products through the distribution and marketing network and has the possibility of accumulating intermediate inventories to cushion the fluctuations in demand and to absorb eventual quality problems.
On the other hand, the provision of services implies different degrees of contact with the borrower, all of them involve a very direct relationship with him: in fact, it can range from close contacts, as in the case of medical and cosmetic service providers, to "remoteness". of electricity or cable television service providers, however in any of them the user immediately perceives almost any problem that affects the service provider or the provision it makes: given the simultaneity between production and consumption, there can be no intermediate buffers that allow the situation to be overcome without direct effect on the service provided to the user.
Hence, the much greater importance of the formulation and implementation of the service delivery strategy, to competitively ensure a consistently high quality and customer satisfaction, at prices and costs profitable for both parties.
Strategic Considerations
It is as a result of this that according to Beny - one of the world's leading specialists in service management and marketing - the service strategy must necessarily integrate four principles:
- service reliability: reliability levels; tranquility, availability, security and empathy. Pleasant surprises for the customer: details and extra efforts appreciated by the customer. Overcoming failures: speed in detecting, resolving and preventing and, equity in relationships: beyond complying only with the legal.
In addition, Beny proposes the implementation of the service strategy through the organization, technology and people:
- organization: harmony in structure, systems, symbols, values, people, competencies, allocation of responsibilities and resources. Technology: automation and control applied to materials, methods and information, to improve the services provided. People: critical competencies in service provision, competition for talent, development of skills and knowledge to provide services, empowerment and group work, performance measurement and variable compensation.
The objectives to be achieved in terms of people's competences can be linked or concatenated in the form of a tree and configure the "human or learning and growth perspective" of the company's Balanced ScoreCard, a perspective that must necessarily be matched with the "perspective of excellence in the internal business processes »necessary to satisfy customers and shareholders.
Hence, the most important considerations to have in relation to each of these aspects, to get customers to say wow! are based on promoting:
- reliability: ability to provide promised services in a safe, caring and punctual manner, etc. From the first moment. Tangibility: appearance and consistency of physical facilities, equipment, personnel, materials, communication, etc. Availability: accessibility and goodwill to meet the needs of customers and provide them with a prompt service, fulfilling their commitments on time. Security: knowledge and courtesy of the staff and their ability to win the faith and trust of the clients. Empathy: affection, passion, care in the individual attention of the clients, understanding the emotion in which they find themselves and acting accordingly emotional intelligence.
Balancing Goals
All these quality objectives -measuring "customer satisfaction" - can be expressed through ratios and linked together in the form of a tree, facilitating the construction of the "customer perspective" of the Balanced Scorecard © of the service company: a high level of "customer satisfaction" will contribute both to customer retention and to the acquisition of new ones, which in turn could increase market share and therefore sales and therefore "satisfaction of the shareholders ».
Now -to be really excellent- the quality of the service must also be achieved with quality, effectiveness and efficiency in the processes that lead to the provision of the service, in order to achieve high levels of productivity that enable the sale of services at cost prices / beneficial for customers and profitable for producers.
The ratio between the unit cost of the services provided at 100% productivity and the real unit cost of the services provided allows us to calculate the level of productivity at which we are working: it is not possible to achieve 100% excellence if they are not achieved simultaneously levels of excellence in the quality, effectiveness and efficiency of the processes leading to the provision of services.
These three subjects strongly related to people's competences are measurable through indicators or ratios between variables that measure attributes of the services provided or used. These objectives of excellence in processes can be linked or concatenated in the form of a tree and configure the «perspective of internal business processes» of the Balanced ScoreCard of the service company: perspective that through the quality of the services would be linked to the "Perspective of customer satisfaction", and that through productivity and costs would be linked to the "perspective of shareholder satisfaction".
Putting it all together
Our previous development has allowed us to summarize the main aspects that need to be strategically designed and implemented to satisfy customers through excellent internal processes based on competencies and appropriate technologies.
This implies generating value for customers (satisfaction) through excellent (productive) processes, which in turn requires generating value for workers (motivation, training, understanding) in line with the generation of value by them through their competences, but in addition all this must be organized to also adequately satisfy the shareholders through the generation of value for them.
Shareholder satisfaction involves both generating image and having good relationships with the community and adding economic / financial value.
The economic added value can be measured through the EVA (Economic Value Added): interesting and useful modality created by Stern Stewart of NY (net operating profits after taxes less the total opportunity cost of capital immobilized on the net operating assets used to generate Utility).
If we link the EVA as a tree and the driving variables that determine it (intermediate objectives), we can configure the “shareholder perspective” of the BSC of the company that interests us, and disaggregate -from it- the 3 other perspectives. This allows not only to synthesize the set of strategic objectives of the service company, but to reflect its vision, mission and strategy, facilitating the realization of the value-generating levers in which we should support our service management to ensure business success in the achievement of what we want: final objective of the strategic management of service companies.
With this guide we can then characterize -systematically- the service provider company and its component units, relating their objectives to the objectives of their clients, their needs to be competitively satisfied, the services to be provided with which we would best achieve, the processes for Productively produce these services, the needs that these processes carry out would imply and the suppliers that we should gather to satisfy them, together with characterizing the organization and adequate infrastructure for the profitable provision of the services offered.
In addition, we should formulate the business plan, having established our marketing and sales, service provision, facility maintenance, supply and purchasing, human resources, administration and finance plans, and establish management assurance mechanisms. that allow us to adjust the course and the march, in accordance with the strategic learning that our successes and errors are pointing out to us: the challenge is the search for a very high performance despite the turbulence of the scenarios that are presented or perceived, utopia is to think about achieving it without building viability, without opening paths while walking…
