Assuit University Assuit University Faculty of Computers and Information Service Management

Service Management Operations, Strategy, Information Technology Publisher: McGraw Hill Higher Education; 7th edition (December 1, 2010)

Service Management Service Management Operations, Strategy, Information Technology Understanding Services – The Role of Services in an Economy – The Nature of Services – Services Strategy Designing the Service Enterprise – New Service Development – Technology in Services – Services Quality – Process Improvement – The Service Encounter – Supporting Facility and Process Flows Managing Service Operations – Managing Capacity and Demand – Growth and Globalization of Services – Managing Projects Quantitative Models for Services Management – Capacity Planning and Queuing – Forecasting Demand for Services – Managing Service Inventory Course Outlines

Understanding Services Part (1)

What Are Services ? Services touch the lives of every person every day; Food services, Communication services, Transportation, Government services Emergency services Services are every where in our life Services are actions or an action that someone does for you

Services are intangible property since you don’t receive anything solid and you don’t obtain ownership of the actions taken. The purchaser / buyer of a services gets something needed but does not own any tangible, solid or fixed property. Services are taxable, regardless of the source.., What Are Services?

Service Definitions  Services are deeds, processes, and performances. Valarie Zeithaml & Mary Jo Bitner  A service is a time-perishable, intangible experience performed for a customer acting in the role of a co- producer.  Service enterprises are organizations that facilitate the production and distribution of goods, support other firms in meeting their goals, and add value to our personal lives. James Fitzsimmons

What is a service? Service is something that is delivered and adds value to the customer and allows the customer to achieve a desired outcome, however the customer is not interested in taking full responsibility gain ownership of the service ITIL V3 Definition The service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.

What is Service Management ? services Service Management is a set of specialized organizational capabilities for providing value to customers in the form of services.., –Specialized; because focusing on IT infrastructure environment –Organizational capabilities; because we need function (right people with the right skills & knowledge for certain role)

Why Study Services ?

Economic Development Modern Industrialized economies are dominated by employment in services sector Society economic activity determines the way and standard of living (How to be measured?) The growth of the services sector is attributed to innovation, social trends, and IT ( e.g Internet)

Changing Structure of Employment as Economic Development Evolves

Economic of Services

Understanding Services The Role of Services in an Economy The Nature of Services Services Strategy

Role of Services in an Economy INFRASTRUCTURE SERVICE · Communications · Transportation · Utilities · Banking PERSONAL SERVICES · Healthcare · Restaurants · Hotels CONSUMER (Self-service) GOVERNMENT SERVICES · Military · Education · Judicial · Police and fire protection DISTRIBUTION SERVICES · Wholesaling · Retailing · Repairing FINANCIAL SERVICES · Financing · Leasing · Insurance MANUFACTURING Services inside company: · Finance · Accounting · Legal · R&D and design BUSINESS SERVICES · Consulting · Auditing · Advertising · Waste disposal Essential links Infrastructure Services are prerequisite for any economy to become industrialized. No advanced societies can be without Infrastructure & Distribution Services. Services are not peripheral activities but became integral parts of society.

Economic Evolution In early 1900, only 3 of every 10 workers were employed in services sector By 1950 employment in services reaches 50% of the workforce Since year 2000 the percentage of employment became 80% in services sector. Services Manufacturing Agriculture Clark-Fisher Hypothesis As productive increases in one sector, the labor force moves into another As productive increases in one sector, the labor force moves into another “Colin Clark”

Stages of Economy Activity Primary (Extractive) Agriculture Mining Fishing Forestry Secondary (Goods-Producing) Manufacturing Processing Tertiary (Domestic Services) Restaurants & Hotels Barber & Beauty Shops Maintenance Quaternary (Trade & Commerce Services) Transportation, Communication, Retailing, Government Quaternary (Trade & Commerce Services) Transportation, Communication, Retailing, Government Quandary (Refining & Extending Human Capacities) Health, Education, Research, Arts

Labor Migration Agriculture Manufacturing Services

Stages of Economic Development 1.Preindustrial Society Economy is based on extracting natural resources from the land Productivity is low Income is subject to fluctuations based on commodities price The rhythm of life is shaped by nature High rates of underemployment (workforce not fully utilized) 2.Industrial Society The predominant activity is goods production Focus on making more with less People tend to machines (output per labor-hour) The rhythm of life is machine-paced (rigid working hours – Value of time) Standard of living measured by quality of goods Systematic, bureaucratic and hierarchic organizations The individual is the unit of social life. In industrialized economy; specialized firms can supply business services to manufacturing firms more cheaply and efficiently.

Stages of Economic Development 3.Postindustrial Society Concern with quality of life, as measured by services The central figure is the professional person Information is the key resource Social life becomes more difficult (Political & Social rights) The community becomes the social unit rather than individual More workers engage in nonmanufacturing activities drops increases Percentage spent in food and durables drops while consumption of services that enriched life increases (Maslow hierarchy of needs) Higher education becomes the condition for entry into workforce market. (Professional & Technical Skills) Concerns for environmental protection.

Nature of Service Sector (Domestic Services) Restaurants & Hotels Barber & Beauty Shops Maintenance (Trade & Commerce Services) Transportation, Communication, Retailing, Government (Trade & Commerce Services) Transportation, Communication, Retailing, Government ( Refining & Extending Human Capacities ) Health, Education, Research, Arts High skilled Professionals Low-Wage or Low-Skill Jobs Specialist The subsequent growth in service sector has caused a shift toWHITE-COLLAR

The 21 st Century Career More career opportunities for everyone Freedom to choose from a variety of Jobs, task, and assignments Flexibility in how and where work is performed (Internet, work from home, …) Control your own time Self-empowerment mindset Ability to shape and reshape your life’s work in accordance with your values and interests

New Experience Economy Consumer Service Experience  Experiences create added value by engaging and connecting with customer in a personal and memorable way. Service Economy New Experience Economy  Business transition from Service Economy to New Experience Economy Consumer experiences characterized by the level of customer participation and level of interaction with the environment, (e.g., Entertainment is the least, however, Escapist requires the most commitment from customer)

New Experience Economy Business Service Experience For B2B services, value is derived from coproduction or collaborative nature of the relationship; e.g consultancy. Business Service Experience has 3 dimensions; – Co-creation of value Customer is a co-producer of value extracted from relationship Customer is an input to service process – Relationships Relationship with Customer is source of innovation and differentiation Long-term relationships facilitate the ability to tailor service offerings to customers’ needs – Service capability Provide service capacity to meet fluctuations in demands while retaining quality of service Quality of service is measured primarily from the perspective of the customer

Service sector growth is fueled by advances in information technology, innovation, and changing demographics that create new demands – Information Technology IT has a substantial impact on the growth of digital services IT has impacted the service delivery process and created new value Sources of Service Sector Growth ProductServices Physical Information (Digital) 5% 10% 30% 55% 35% 65% 84% 16% D B A C GDP GDP – Gross Domestic Product Cars Steel Chemicals Transportation Retailing business Communication Health (X-rays – off-shore interpretation) Financial (banking services) Consultation Computers DVDs TV sets

Sources of Service Sector Growth – Innovation Push theory (e.g. 3M Post-it notes) Pull theory (e.g. Cash Management) Services derived from products (e.g. Netflix) Exploiting information availability (e.g. Auto part sales, maintenance service) Difficulty of testing service prototypes (e.g. Drive- through window fast-food restaurant) – Changing Demographics Aging of the population Growth in number of single people Social change lead / result to new service industry  e.g., health services improvement leads to old age houses services industry  People live longer Vs. Pension polices & plans

Role of Services in Economy Key Terms & Definitions – Clark-Fisher hypothesis – Experience Economy – Preindustrial, Industrial, and Postindustrial Societies – Pull theory and Push theory of innovation