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What Is Service And Why It Is Needed?

27/05/2017 0 0

What is Service?

According to ITIL the definition the service is “means of delivering value to customers by facilitating the outcomes that the customer wants to achieve without specific ownership of cost and the risk”.

Let us understand it with some references and instances.

The value for customer composes of three important elements: Outcomes, Preferences, Perceptions.

Outcomes are the results of carrying an activity or using a product or consuming a service.

After a tiring and hectic working day I am hungry but not feeling like going out. The Pizza, Burger or any food of my choice delivered at my door step that fulfills my hunger is what I consider as the outcome.

The food is delivered as per my expectations such as the crust, toppings, cheese, hot, tasty, timely and affordable then I would consider that it is meeting my preferences.

However, I may compare all the features crust, toppings, cheese, hot, tasty etc with my previous experiences and might feel good, bad or ugly about the current experience of food. This is called perception.

All three components put together create the VALUE in the minds of customer.

The service provider is expected to own the cost and the risk of delivering the service. Customer will pay the price.

In the example that we discussed, the service provider is expected to own the rent of the premises, oven, dough, ingredients, chef, and the delivery mechanism. All that customer wants is to ready to eat hot pizza delivered at door step for which he is ready to pay the price that includes the cost of all of these items along with the profit component.

Why Service?

We are living in a service based economy. I think we all should know how to manage a service. According to some surveys back in 2009 more than 80% of the global economy is contributed by Services.

The Products today have a higher service component than in previous decades. In the management literature this is referred to as the servitization of products. Virtually every product today has a service component to it. It is important to understand the service and to know how to manage it.

A great product with poor service may fumble, but a good product with great service will stay.

Many product companies such as IBM, HP and Microsoft have reinvented themselves and regained their leadership status after moving into service culture and mindset. These companies quickly realized the significance of service in selling their products.

Every working professional should have the skill and competence in Service Management.



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