Key Concepts Of Service Management

Question 1

What is the definition of ‘Value’?

Answer 1

Value is the perceived benefits, usefulness, and importance of something.

Question 2

How is value created?

Answer 2

Value is co-created through an active collaboration between service providers and service
consumers, and other stakeholders. Value is subject to the perception of different stakeholders.

Question 3

Define ‘Service Providers’

Answer 3

When provisioning services, an organization takes on the role of the service provider. The provider can be external to the consumer’s organization, or they can both be part of the same organization.

Question 4

Define ‘service consumer’

Answer 4

When receiving services, an organization takes on the role of the service consumer.

Question 5

What are the roles for service consumers?

Answer 5

Service consumer is a generic role; in practice, service consumption includes more specific roles: customer, user, and sponsor.

Question 6

What is the role of the customer?

Answer 6

Customer is a role that defines the requirements for a service and takes responsibility for the outcomes of service consumption.

Question 7

What is the role of a sponsor?

Answer 7

Sponsor is a role that authorizes budget for service consumption.

Question 8

What is the role of the user?

Answer 8

User is the role who uses services.

Question 9

What is a service?

Answer 9

A means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.

Question 10

What is a product?

Answer 10

A configuration of an organization’s resources designed to offer value for a consumer.

Question 11

What is a service offering?

Answer 11

A description of one or more services, designed to address the needs of a target
consumer group. A service offering may include goods, access to resources, and service actions.

Question 12

What are service relationships?

Answer 12

Service relationships are mutually beneficial, interactive service relationships between service and service consumer. Service relationships include service relationship management, service provision, and service consumption.

Question 13

What is service relationship management?

Answer 13

Service relationship management consists of “joint activities performed by a service provider and a service consumer to ensure continual value co-creation based on agreed and available service offerings.

Question 14

What is service provision?

Answer 14

Service provision consists of “activities performed by a service provider to provide services.”

Question 15

What is service consumption?

Answer 15

Service consumption consists of “activities performed by a service consumer to consume services.”

Question 16

What is the relation between output and outcome?

Answer 16

A service provider produces outputs that help its consumers to achieve certain outcomes.

Question 17

What is an output?

Answer 17

Output: “An output is a tangible or intangible deliverable of an activity.”

Question 18

What is an outcome?

Answer 18

Outcome: “An outcome is a result for a stakeholder enabled by one or more outputs.”

Question 19

What are costs?

Answer 19

Costs: “The amount of money spent on a specific activity or resource.”

Question 20

What are the two types of costs involved in service relationship (customer’s perspective)?

Answer 20

1) Costs removed from the consumer by the service (part of value proposition)
2) Costs imposed on the consumer by the service (costs of service consumption)

Question 21

What is a risk?

Answer 21

Risk: “A possible event that could cause harm or loss, or make it more difficult to achieve objectives.”

Question 22

What are the two types of risks from a service customer’s perspective?

Answer 22

1) Risks removed from the consumer by the service (part of value proposition) —
2) Risks imposed on the consumer by the service (risks of service consumption)

Question 23

What is utility?

Answer 23

Utility is the functionality offered by a product or service to meet a particular need.

Question 24

What are the three features of utility?

Answer 24

1) Represents what the service does
—2) Determines whether a service is ‘fit for purpose’
3) Requires that a service must either support the performance of the consumer or
remove constraints from the consumer

Question 25

What is a warranty?

Answer 25

Warranty is the assurance that a product or service will meet agreed requirements.

Question 26

What are the four features od a warranty?

Answer 26

1) Represents how the service performs
2) Determines whether a service is ‘fit for use’
—3) Requires that a service has defined and agreed conditions that are met
—4) Ensures the appropriate level of availability, capacity, continuity, and security