Shrikant Kulkarni

Services
“ Activity or benefit that one party can offer to another
that is essentially intangible and does not result in the
ownership of anything. Its production may or may not be
tied to a physical product. ”

MITES - Shrikant Kulkarni 2

MITES - Shrikant Kulkarni 3
MITES - Shrikant Kulkarni 4
MITES - Shrikant Kulkarni 5
MITES - Shrikant Kulkarni 6
The Problem of Service
Innovation

“… modern economies are both service

economies and economies of innovation.
Paradoxically, they are not regarded as
economies of innovation in services... It is as
if service and innovation were two parallel
universes that coexist in blissful ignorance of
each other.”
MITES - Shrikant Kulkarni 7
Services - Features
Intangibility
 Hard to grasp, concept is abstract
 Customer is unable to experience the ‘product’ prior to ‘purchase’
 Dramatization often necessary for concept
Perishability
Services cannot be stored or held in inventory.
If not used when available, they “go to waste”.
Inseparability
 Outlet accessibility can limit the area covered by the service.
 Image is important: Image affects the perception of the service.
 Consumer is present when service is produced.
 Hard to separate the service provider and the service

MITES - Shrikant Kulkarni 8

Services - Features
Variability
Service quality tends to vary considerably.
Difficulty in establishing consistency in quality
across Providers or within providers
across Time

across Delivery Centers

Non-inventorability
Heterogeneity
Simultaneity

MITES - Shrikant Kulkarni 9

• provide consumers with products /services at the lowest
total cost

• product line offered to consumers is standardized and

limited

• Products / services are highly reliable

• customer service pursues the highest level of convenience

• there is a high level of teamwork among employees in these

firms

MITES - Shrikant Kulkarni

 Tailor offerings to meet individual needs
 Success through an increasingly fine understanding
of exactly what each customer needs and the ability
to deliver exactly these services and products
 Products / services are highly diverse and configured
 customer service pursues the highest level of
intimacy
 If there is potential for long term growth, each
customer representative has wide latitude to meet
individual client needs, regardless of short term costs

MITES - Shrikant Kulkarni

• Attempts to provide a steady stream of cutting
edge solutions
• Willing to invest in high risk/high reward
ventures within narrowly focused areas of
expertise
• products are narrowly focused, but very cutting
edge
• These firms reward individuals that can see
unique solution opportunities, act independently
to develop unique solutions and bring these
solutions to market
MITES - Shrikant Kulkarni
Transactional Selling to Consultative
Selling to Enterprise-Wide Selling

MITES - Shrikant Kulkarni

MITES - Shrikant Kulkarni 14
Functions/Uses of 7-S-Model
Used for internal analysis of a company
Analyze strategic characteristics of a company
Tool for determining the “do ability” of strategies
Used to create alignment among various departments of an
organization
Examines effect of change on a company
Analyze the “successful and dysfunctional” aspects of an
organization

MITES - Shrikant Kulkarni 15

Weakness
Focuses on internal fit of an organization

Ignores effect of factors external to the

organization
Why 7-S Model
Profitable, “purposeful, efficient organizational
action” cannot be successfully executed if internal
elements are not aligned

MITES - Shrikant Kulkarni 16

Essence of the Framework
“Hard S” - rational and factual aspects: focuses on Strategy,
Systems, and Structure.

 Strategy – a plan of action to maintain competitive advantage over the

competition. The direction and scope of the company over the long term.

 Systems – measures and actions which accommodate the execution of daily

activities . Formal and informal procedures that govern everyday activity,
covering everything from management information systems, through to the
systems at the point of contact with the customer (retail systems, call centre
systems, online systems, etc).

 Structure – the way the organization is structured, who reports to whom.

The basic organization of the company, its departments, reporting lines,
areas of expertise, and responsibility (and how they inter-relate).

MITES - Shrikant Kulkarni 17

Essence of the Framework
“Soft S” - social and interpersonal behavior: focuses on Style,
Shared Values, Staff, and Skills

Style –The leadership approach of top management and the

company's overall operating approach

Shared Values – company culture, work ethics etc ,Ultimately they

guide employees towards 'valued' behavior.

Staff – company employees and their capabilities i.e. how they are
developed, trained, and motivated.

Skills – core competencies of the company as well as that of its staff

MITES - Shrikant Kulkarni 18

Application of the Framework - Strategy
Global strategy Multidomestic strategy
 Standardization of  Adjust products and
products, processes and operations according to each
operation around the country or market served
world

HQ HQ

Source: Strategic Management. Pitt and Lei, 2003

MITES - Shrikant Kulkarni 19
Application of the Framework - Systems

Country 1

•In each country, a copy of the ERP

is installed with modifications to
accommodate language
•A version of the website in each
These 3 servers represent the US Country is created and hosted
website, ERP, and database server •The local ERP and website use
Country 2 the local database server
•The local database is
synchronized with the central
database server in Boston several
times daily.

International *Because all locations use the same

Data Warehouse Database design and have the same basic
operations this model becomes highly
modular and easy to implement multiple
times.

Country 3

Web Server
Database Server
Application Server

MITES - Shrikant Kulkarni 20

Application of the Framework – Structure

Geographic Division Structure

Hierarchical -Two way open communication
Self contained product/function to meet local
needs
Promotes a high level of decentralization

MITES - Shrikant Kulkarni 21

Application of the Framework –Style
The competitive executive
 Flexible and adaptive to Stakeholders needs

 Seizes and exploits opportunities

 Focuses on increasing the company’s share of

market at a profit

MITES - Shrikant Kulkarni 22

 Application of the Framework-
SharedValues
Maintenance of the firm’s corporate culture
globally

Strong work ethics among new employees

Healthy balance of competitiveness and cooperation

amongst applicants

MITES - Shrikant Kulkarni 23

Application of the Framework - Staff
Recruitment of new consultants in their respective
countries

Attract experienced employees at other firms

Offer incentives which should be determined by the

culture of the country

Provide additional training

MITES - Shrikant Kulkarni 24

Application of the Framework - Skills
Skills for an International Market
Communication, Administrative, Finance and Accounting,
Customer Service, Marketing, Product Development, IT
High Level of linguistic capabilities

Examine foreign recruitment opportunities

Seek the best job techniques for individual countries

Exposure of US based consultants to the global

marketplace

MITES - Shrikant Kulkarni 25

Globalization of services
 The pace of technological change in ICT in recent years has led to
revolutionary changes in the processing and dissemination of data and to
the emergence of an information society.

 The combination of information technology and telecommunications

technology has greatly enhanced existing service industries and has led to a
spin-off of numerous new ones.

 Many different services can be provided through a single network; a given

service can be provided through multiple networks using different
technologies.

 Competing in a “flattening” world…….

MITES - Shrikant Kulkarni 26

Knowledge Services
 Adding high value through advanced analytical and technical skills

This includes:
 Research and work on intellectual property, equity and finance,
analytics, market research, clinical research and data management among
others

 Legal off-shoring services business is also part of this domain. These

services could include the entire spectrum of work related to intellectual
property from preparing patent applications to IP commercialization

 Outsourcing engineering and design work involving plant design, chip

design, and animation.

 Judgement-based work in education and publishing businesses, medical

content and services

MITES - Shrikant Kulkarni 27

Gap Analysis

MITES - Shrikant Kulkarni 28

Gap Analysis
Gap analysis is a survey instrument used to determine the gaps
between a service offered and a customers expectations.
 Gap1: Customers’ expectations versus management perceptions
 Gap2: Management perceptions versus service specifications
 Gap3: Service specifications versus service delivery
 Gap4: Service delivery versus external communication
 Gap5: The discrepancy between customer expectations and their
perceptions of the service delivered
 Gap6: The discrepancy between customer expectations and employees’
perceptions
 Gap7: The discrepancy between employee’s perceptions and
management perceptions

MITES - Shrikant Kulkarni 29

SERVQUAL
The marketing research team of Parasuraman, Zeithamel,
and Berry created this service quality measuring tool in
1988
 The instrument can enable organisations
 To identify and understand where service gaps exist within the organisation and
between the organisation and its customers
 Prioritize those gaps in terms of relative impact on quality of service
 Identify the reasons for the existence of those gaps
 Develop a programme of activities to close those gaps
 Implement an appropriate set of processes to continuously review and refine
customer service quality
 SERVQUAL is not a measurement to compare and rank separate companies
but only to provide a measure for managers to determine actions needed in
their own services

MITES - Shrikant Kulkarni 30

Five Generic Dimensions of Servqual
Tangibles: appearance of physical facilities, equipment,
personnel, and communication materials
Reliability: ability to perform the promised service
dependably and accurately
Responsiveness: willingness to help customers and
provide prompt service
Assurance: knowledge and courtesy of employees and
their ability to convey trust and confidence
Empathy: the caring, individualized attention the firm
provides its customers

MITES - Shrikant Kulkarni 31

SERVQUAL Applications

SERVQUAL is widely used within service industries to

understand the perceptions of target customers regarding
their service needs. And to provide a measurement of the
service quality of the organization.
SERVQUAL may also be applied internally to
understand employees' perceptions of service quality. With
the objective of achieving service improvement.

MITES - Shrikant Kulkarni 32

Steps in SERVQUAL Process
Customers are asked to answer numerous questions
within each dimension that determines:
The relative importance of each attribute.
A measurement of performance expectations that would
relate to an "excellent" company.
A measurement of performance for the company in question
 Data is compiled
Analysis of Data
Item-by-item analysis
Dimension-by-dimension analysis
Overall Servqual Gap

MITES - Shrikant Kulkarni 33

Customized Servqual Instruments

IT SERVQUAL
Developed by Kettinger and Lee in 1994
Focused on information service attributes
Consisted of 22 items
Service oriented IT Servqual
 Modified to incorporate specific service dimension within IT
industry
 18 important items

MITES - Shrikant Kulkarni 34

MITES - Shrikant Kulkarni 35
MITES - Shrikant Kulkarni 36
Parasuraman,A.;Berry,Leonard
L.;Zeithaml,Valarie A., “SERVQUAL: A
Multiple-Item Scale For Measuring
Consumer Perceptions of Service Quality”,
Journal of Retailing, 1988, 64, 1, 12-40

Axel Hochstein,“MANAGING IT SERVICE

QUALITY AS PERCEIVED BY THE
CUSTOMER: THE SERVICE ORIENTED IT
SERVQUAL”