Understanding Key Concepts of Service Management Flashcards
Recall the definition of Service
A Service is defined as 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.”
Recall the definition of Utility
Utility is defined as the “functionality offered by a product or service to meet a particular need. Utility can be summarized as ‘what the service does’ and can be used to determine whether a service is ‘fit for purpose’. To have utility, a service must either support the performance of the consumer or remove constraints from the consumer. Many services do both.”
Recall the definition of Warranty
Warranty is defined as the assurance “that a product or service will meet agreed requirements. Warranty can be summarized as ‘how the service performs’ and can be used to determine whether a service is ‘fit for use’. Warranty often relates to service levels aligned with the needs of service consumers. This may be based on a formal agreement, or it may be a marketing message or brand image. Warranty typically addresses such areas as the availability of the service, its capacity, levels of security and continuity. A service may be said to provide acceptable assurance, or ‘warranty’, if all defined
and agreed conditions are met.”
Recall the definition of Customer
A Customer is defined as a “person who defines the requirements for a service and takes responsibility for the outcomes of service consumption.”
Recall the definition of User
A User is defined as a “person who uses services.”
Recall the definition of Sponsor
A Sponsor is defined as a “person who authorizes budget for service consumption.”
Recall the definition of Service Management
Service Management is defined as a “set of specialized organizational capabilities for enabling value for customers in the form of services.”
Key Concepts of creating Value
Organizations strive to create value for their stakeholders. Those stakeholders are both within and without the organization itself.
Value is subjective it is influenced mainly by whether or not the stakeholder achieves their outcomes, but is also influenced by factors such as financial cost, perceptions, previous experiences, speed, ease of use, safety etc.
Recall the definition of Value
Value is defined as “the perceived benefits, usefulness and importance of something.”
Explain value co-creation
Modern organizations recognise that value is co created through an active collaboration between service providers and service consumers, as well as other stakeholder organizations that are part of the Service Value Chain.
Therefore Service Providers should actively seek to establish mutually beneficial, interactive relationships with their consumers (and other stakeholders as appropriate), empowering them to be creative collaborators in the Service Value Chain.
Recall the definition of Organisations
Organizations are defined as a “person or a group of people that has its own functions with responsibilities, authorities and relationships to achieve its objectives.”
Give 3 types of organisations
Service Providers - can be external to the consumer’s organization, or part of the same organization, or be part of a collaborative service alliance.
Service Consumers - “is a generic role that is used to simplify the definition and description of the structure of service relationships.” The Service Consumer organization includes Customers, Users and Sponsors.
Other Stakeholders - e.g. employees, unions, suppliers, shareholders, government bodies, independent industry bodies, social groups etc.
Recall the definition of Outcomes
An Outcome is defined as a “result for a stakeholder enabled by one or more outputs”.
Recall the definition of Outputs
An Output is defined as a “tangible or intangible deliverable of an activity”.
Explain the relationship between outcomes and outputs
Service Providers produce outputs that help their Service Consumers to achieve their outcome(s).
For example, recordings are the Output of music companies. Customers buy them to achieve their Outcome of pleasurable listening to music.
Service Providers may produce Outputs speculatively, hoping that consumers will find that they wish to achieve new Outcomes e.g. IoT home devices.
Recall the definition of Costs
Cost is defined as the “amount of money spent on a specific activity or resource”.
What are the 2 types of cost from a Service Consumers viewpoint?
Costs removed by using the service e.g. staff costs
Costs imposed by using the service, e.g. the price of the service, staff training etc
Recall the definition of Risks
Risk is defined as a “possible event that could cause harm or loss, or make it more difficult to achieve objectives. Risk can also be defined as uncertainty of outcome, and can be used in the context of measuring the probability of positive outcomes as well as negative
outcomes”.
What are the 2 types of risk from a Service Consumers viewpoint?
Risks removed (or reduced) by using the service e.g. staff skill levels
Risks imposed by using the service, e.g. a security breach at the Provider, etc
How can Service Consumers minimise risks to Service Providers?
Actively participating in the definition of the requirements of the service and the clarification of its required outcomes
Clearly communicating the critical success factors (CSFs) and constraints that apply to the service
Ensuring the provider has access to the necessary resources of the consumer throughout the service relationship
What is the relationship between value, utility & warranty?
For a service to be valuable, it must have the appropriate Utility and Warranty to allow the Service Consumers to achieve their Outcomes. However if the costs of that Utility and Warranty are too high, or the Risks are not adequately managed, the service will not be seen as
valuable by the Service Consumers.
Recall the definition of Service Offerings
A Service Offering is defined as 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.”
What may service offerings include?
Goods - to be supplied to a Consumer, e.g. a laptop. Goods are typically transferred from the Provider to
the Consumer , the Consumer taking responsibility for their future use.
Access to Resources - granted or licensed to a Consumer under agreed terms and conditions, e.g. access to
the Internet. The resources remain under the Provider’s
control and can be accessed by the Consumer only during the agreed service consumption period & conditions.
Service Actions - performed to address a Consumer’s needs, e.g. technical support. These actions are performed by the Provider according to the agreement with the consumer.
Recall the definition of Service Relationship
A Service Relationship is defined as a “co operation between a service provider and service consumer. Service relationships include service provision, service consumption and service relationship management.”
Recall the definition of Service Relationship Management
Service Relationship Management is defined as “Joint activities performed by a service provider and a service consumer to ensure continual value co creation based on agreed and available service offerings.”
Recall the definition of Service Provision
“Activities performed by an organization to provide services. Service provision includes:
• management of the provider’s resources, configured to deliver the service
• access to these resources for users
• fulfilment of the agreed service actions
• service level management and continual improvement.
Service provision may also include the supplying of goods.”
Recall the definition of Service Consumption
“Activities performed by an organization to consume services. Service consumption includes:
• management of the consumer’s resources needed to use the service
• service actions performed by users including:
• utilizing the provider’s resources
• requesting service actions to be fulfilled
Service consumption may also include the receiving (acquiring) of goods.”
How can consuming services by a Service Consumer create new or modified resources/capabilities for that Organisation?
- Training enhances the skills of the consumer’s staff
- Network services allow the consumer’s computers to communicate
- A vehicle hire service enables or enhances the consumer’s transportation
- Software development services create new applications for the consumer
The Service Consumer can then use its new or modified resources/capabilities to create its own services targeted at other Organizations.
