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ISS Service Innovation Leadership Seminar, 28 March - Jochen Wirtz

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ISS Service Innovation Leadership Seminar, 28 March 2014- "Service Excellence, Productivity & Profitability - Can Service Innovation Deliver on All Three Dimensions?" by Professor Jochen Wirtz Ph.D, …

ISS Service Innovation Leadership Seminar, 28 March 2014- "Service Excellence, Productivity & Profitability - Can Service Innovation Deliver on All Three Dimensions?" by Professor Jochen Wirtz Ph.D, Professor of Marketing, Director UCLA - NUS Executive MBA Programme

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  • 1. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 1 Can we have it all – Service Excellence, Productivity & Profitability? ISS Service Innovation Series: Transformation Services through Service Innovation Professor Jochen Wirtz Director, UCLA – NUS EMBA NUS Business School National University of Singapore Singapore, 28 March 2014
  • 2. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 2 In Service Organizations Management Functions Must Be Tightly Integrated With Each Other Customers Operations Management Marketing Management Human Resources Management Product Price Place Promotion People Processes / IT Physical Environment
  • 3. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 3 What is the Relationship Between Service Quality, Productivity and Profitability? Service Quality Productivity Profitability + + + / 0 / - 4) SST2) Dual Culture 5) Focused Service Factory 3) Systems & Technology 1) Generic Strategies
  • 4. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 4  Cost control, reduce wastage  Train & motivate employees to do things faster, better & more efficient  Better capacity utilization (better matching of supply & demand  Customer service process redesign (CSPR); (Lean) Six Sigma  Use of machines, technology & data  Outsourcing of non-core activities, back-office activities  Tiering of service to allocate resources better to more important customers; Hard product/service level choices Increasing Productivity without (much) Impacting the Customer Interface: 1. Generic Strategies to Enhance Productivity
  • 5. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 5 Flying High in a Competitive Industry: Cost-effective Service Excellence at Singapore Airlines Source: Loizos Heracleous and Jochen Wirtz, “Singapore Airlines’ Balancing Act - Asia’s Premier Carrier Successfully Executes a Dual Strategy: It Offers World-class Service and is a Cost Leader,” Harvard Business Review, 2010, Vol. 88, No. 7/8, 145-149 2. Dual Culture Strategy
  • 6. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 6 3. Systems & Technology
  • 7. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 7 4. Self-service Technology (SST)
  • 8. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 8 UCLA – NUS EMBA participants visiting Narayana Hrudayalaya Hospital in Bangalore 5. The Focused Service Factory
  • 9. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 9 (2) Isolate Technical Core & Shift Activities to Back-Office (3) Reduce Customer Contact & Choice (4) Production Lining/ Industrialized Service Model (1) Full-service model ReducingUncertainty,ProcessFlexibility,CustomerChoice StandardizationofInput,Process&Output • Cost control, reduce wastage • Train & motivate employees to do things faster, better, more efficient • Better capacity utilization (better matching of supply & demand) • Customer service process redesign (CSPR); (Lean) Six Sigma • Use of technology (e.g., biometrics) • Outsourcing on non-core activities, back-office activities • Tiering of service to allocate resources better to more important customers; Hard product/service level choices Increasing Productivity without (much) Impacting the Customer Interface Possible Avenues to Cost-effective Service Excellence 4) SST 5) Focused Service Factory 3) Systems & Technology 1) Generic Strategies 2) Dual Culture
  • 10. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 10 (1) No/Little Change in Customer Interface Change in Business Model / Value Proposition to Customers (2) Isolate Technical Core & Shift Activities to Back-Office (3) Reduce Customer Contact (4) Production Lining/ Industrialization of Service > Same output with less input: • Cost control • Train & motivate employees to do things faster, better, more efficient • Better capacity utilization (better matching of supply & demand) • Customer service process redesign (CSPR); (Lean) Six Sigma • Use of technology (e.g., biometrics) • Outsourcing on non-core activities, back-office activities • Tiering of service to allocate resources better to more important customers; Dual Culture Strategy Example: Singapore Airlines Same Business Model Front-office Minus Modularization of Service, SST Reduced Uncertainty, Process Flexibility & Customer Choice  Allows Increased Use of Technology & Systems  Standardization of Input, Processes & Output Examples: Taco Bell’s K-Minus Program; Banks’ cheque processing plants Examples: Google’s AdWords; ING Direct, ATMs, Ikea; Biometric- enabled immigration Examples: Shouldice Hospital, Narayana Hrudayalaya Hospital; TranscribeMe; many Web- & App- based services > Separate & buffer activities in the front-office and back-office. > Shift activities from the inefficient front-office to the back-office. > Then, industrialize the back- office. • PWP + buffering • Two focused factories (front- office: sales, customer satisfaction; back-office: productivity and low error rate) • Use systems and technology to industrialize the back-office > Reduce customer input into the process to reduce uncertainty > Reduce customer contact with the servuction system • Modularization of products and their features; • Hard product/service level choices • Tight customer scripts • Use systems and technology to industrialize the front - office • Replace customer interactions with SST > Standardize customer input into the process > Minimize customer contact with the servuction system > Standardize/ industrialize the entire servuction process • One/few standard products with few standard features • Tight selection of customer who fit the service model • Extremely tight customer scripts; little flexibility & customization possible • Standard process with much SST Need for Dual Culture Focused Service FactoryGeneric Strategies
  • 11. Slide © by Dr. Jochen Wirtz, 2013 Service Excellence Symposium 2013Page 11 Download free book chapters, articles & cases from: www.JochenWirtz.com