Service Productivity, Quality andInnovation: Implications for Service-   Design Practice and Research   Professor A. ―Pars...
October 23, 2000© Professor A. Parasuraman; not to be reproduced or disseminated without permission   2
Some Preliminary Observations                         Service continues to be mediocre in                          many s...
Service Productivity, Quality and                        Innovation are Intertwined                                       ...
What is Service                   Productivity?© Professor A. Parasuraman; not to be reproduced or disseminated without pe...
Simple Definition of Productivity                                  Output                                              Inp...
Traditional View of Service                               Productivity                                                    ...
Proposed View of Service                                Productivity                    Service productivity can and      ...
Components of Service                                    Productivity              Inputs from company’s perspective: Lab...
A Company-Customer Conceptualization of                    Service Productivity             Company’s Perspective         ...
What is Service                    Quality?© Professor A. Parasuraman; not to be reproduced or disseminated without permis...
From Customers’ Perspective…                         Service quality results from a                          comparison c...
Determinants of Customers’                        Evaluation of a Service                                 The outcome and...
A Common Disconnect between Companies and                                      Customers                                  ...
From a Company’s Perspective…                         Delivering superior service quality                          on a s...
Conceptual Model of Service                             Quality – GAPS Model                        CUSTOMER              ...
GAP 1: Market Information Gap                                                                                   Do you hav...
GAP 2: Service Standards Gap                                                                                Do you have se...
GAP 3: Service Performance Gap                                                                              Does your serv...
GAP 4: Internal Communication Gap                                                                                 Are all ...
Prerequisite for Superior                              Customer Experience                                                ...
An Important Implication of the               Four Organizational Gaps                The internal organizational         ...
Svc. Gaps—Svc. Productivity Link                                                                   Organizational Gaps    ...
A Dual Conceptualization of Service                              Productivity: A Second Look             Company’s Perspec...
Role of Technology in Service                               Delivery                    The ―Technology Readiness‖        ...
Pyramid Model of Services                    Marketing                                                          Technology...
An Important Implication of the                          Pyramid Model                      An organization’s ability to u...
What is Technology Readiness?              Technology Readiness [TR] refers              to ―people’s propensity to       ...
Drivers of Technology Readiness        Contributors                                    Optimism                      Innov...
TR Scores by Dimension and                             Overall TRI*                      4,5                        4     ...
Five TR-Based Customer Segments                                        Optimism Innovative Discomfort Insecurity          ...
High-Tech versus High-Touch                                      Customer Service                                      Hig...
An Important Implication of                          Technology Readiness            To be effective, the implementation  ...
Typology of Service Innovations                                                        Impact on Svc. Productivity: Co. Pe...
Service Innovation Should Ideally              Lead to Service Enhancements                          That:                ...
Evolution Required for Effective                           Service Enhancements                               Service     ...
Critical Issues Worthy of Scholarly                                 Research             Mathematical/analytical modeling...
Critical Issues Worthy of Scholarly                          Research (continued)             Exploring ways for fosterin...
Sources of Additional Information                                       www.technoreadymarketing.com© Professor A. Parasur...
Sources of Additional Information         Parasuraman, A. ―Service Productivity, Quality and           Innovation: Implica...
Thank You!© Professor A. Parasuraman; not to be reproduced or disseminated without permission   41
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Service Productivity, Quality and Innovation: Implications for Service-Design Practice and Research

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Professor A. ―Parsu‖ Parasuraman
University of Miami
Service Science Factory Presentation
Maastricht University
Maastricht, Netherlands
21 January 2011

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Service Productivity, Quality and Innovation: Implications for Service-Design Practice and Research

  1. 1. Service Productivity, Quality andInnovation: Implications for Service- Design Practice and Research Professor A. ―Parsu‖ Parasuraman University of Miami Service Science Factory Presentation Maastricht University Maastricht, Netherlands 21 January 2011
  2. 2. October 23, 2000© Professor A. Parasuraman; not to be reproduced or disseminated without permission 2
  3. 3. Some Preliminary Observations  Service continues to be mediocre in many sectors  Gains in service productivity of firms may lead to lower service quality as experienced by customers  Service innovations may not necessarily lead to gains in service productivity and quality© Professor A. Parasuraman; not to be reproduced or disseminated without permission 3
  4. 4. Service Productivity, Quality and Innovation are Intertwined Service Productivity Service Service Quality Innovation© Professor A. Parasuraman; not to be reproduced or disseminated without permission 4
  5. 5. What is Service Productivity?© Professor A. Parasuraman; not to be reproduced or disseminated without permission 5
  6. 6. Simple Definition of Productivity Output Input© Professor A. Parasuraman; not to be reproduced or disseminated without permission 6
  7. 7. Traditional View of Service Productivity Company’s Inputs Service Productivity Company’s Outputs© Professor A. Parasuraman; not to be reproduced or disseminated without permission 7
  8. 8. Proposed View of Service Productivity Service productivity can and should be evaluated from the perspectives of both companies and customers© Professor A. Parasuraman; not to be reproduced or disseminated without permission 8
  9. 9. Components of Service Productivity  Inputs from company’s perspective: Labor, capital investments, ongoing expenses, etc.  Inputs from customer’s perspective: Monetary cost, time, effort, mental stress, etc.  Outputs from company’s perspective: Revenue, profits, customer loyalty, etc.  Outputs from customer’s perspective: Value, satisfaction, service experience, etc.© Professor A. Parasuraman; not to be reproduced or disseminated without permission
  10. 10. A Company-Customer Conceptualization of Service Productivity Company’s Perspective Customer’s Perspective Inputs Inputs [Labor, Equipment, [Time, Effort, Emotional Technology, etc.] Energy, etc.] Productivity Missing Service Productivity Link! Quality! Outputs Outputs [Sales, Profits, Market [Service Performance, Share, etc.] Satisfaction, etc.]© Professor A. Parasuraman; not to be reproduced or disseminated without permission 10
  11. 11. What is Service Quality?© Professor A. Parasuraman; not to be reproduced or disseminated without permission 11
  12. 12. From Customers’ Perspective…  Service quality results from a comparison customers’ service expectations with their actual service experience  Their service experience frequently falls short of their expectations© Professor A. Parasuraman; not to be reproduced or disseminated without permission 12
  13. 13. Determinants of Customers’ Evaluation of a Service  The outcome and the process of the service delivery  Whether the service is routine or nonroutine© Professor A. Parasuraman; not to be reproduced or disseminated without permission 13
  14. 14. A Common Disconnect between Companies and Customers Customers affected ……and perhaps by this Nature of Service disproportionately by this…… Routine Nonroutine Process Service Delivery Outcome Most customer svc. ……and perhaps standards fall some fall here here……© Professor A. Parasuraman; not to be reproduced or disseminated without permission 14
  15. 15. From a Company’s Perspective…  Delivering superior service quality on a sustained basis is a major challenge  This challenge arises because of four key internal deficiencies or ―gaps‖ within the organization© Professor A. Parasuraman; not to be reproduced or disseminated without permission 15
  16. 16. Conceptual Model of Service Quality – GAPS Model CUSTOMER SERVICE ORGANIZATION Organization’s Market Service Understanding of Information Standards Customers’ Expectations Gap Gap Service Expectations Organization’s GAP 1 Service Standards GAP 2 Service Quality GAP 5 Service Performance Gap GAP 3 Gap GAP 4 Customers’ Organization’s Service Service Perceptions Performance Organization’s Internal Communications Communication to Customers Gap© Professor A. Parasuraman; not to be reproduced or disseminated without permission 16
  17. 17. GAP 1: Market Information Gap Do you have an accurate understanding of customers’ expectations? No or not sure© Professor A. Parasuraman; not to be reproduced or disseminated without permission 17
  18. 18. GAP 2: Service Standards Gap Do you have service standards and are they aligned with customers’ expectations? No or not sure© Professor A. Parasuraman; not to be reproduced or disseminated without permission 18
  19. 19. GAP 3: Service Performance Gap Does your service delivery meet your own internal standards? No or not sure ―McDonald’s Finds Angry Customers on Its Menu‖ -The Wall Street Journal© Professor A. Parasuraman; not to be reproduced or disseminated without permission 19
  20. 20. GAP 4: Internal Communication Gap Are all your interfaces and interactions with your customers synchronized? No or not sure© Professor A. Parasuraman; not to be reproduced or disseminated without permission 20
  21. 21. Prerequisite for Superior Customer Experience Close Gaps 1-4 & hence Gap 5!© Professor A. Parasuraman; not to be reproduced or disseminated without permission 21
  22. 22. An Important Implication of the Four Organizational Gaps The internal organizational gaps not only lead to poor service quality but also adversely affect service productivity!© Professor A. Parasuraman; not to be reproduced or disseminated without permission 22
  23. 23. Svc. Gaps—Svc. Productivity Link Organizational Gaps Managerial: Gaps 1&2 Employee/Systems: Gaps 3&4 Resource Misallocation and Customer Frustration Focus on ―wrong‖ attributes Service delivery deficiencies Opportunities for Improving Service Productivity Reallocation of resources Better customer service© Professor A. Parasuraman; not to be reproduced or disseminated without permission 23
  24. 24. A Dual Conceptualization of Service Productivity: A Second Look Company’s Perspective Customer’s Perspective Inputs Inputs ─ [Labor, Equipment, [Time, Effort, Emotional Technology, etc.] Energy, etc.] + ─ Productivity Service Productivity + Quality + Outputs Outputs [Sales, Profits, Market [Service Performance, Share, etc.] + Satisfaction, etc.]© Professor A. Parasuraman; not to be reproduced or disseminated without permission 24
  25. 25. Role of Technology in Service Delivery The ―Technology Readiness‖ Construct and Its Implications© Professor A. Parasuraman; not to be reproduced or disseminated without permission 25
  26. 26. Pyramid Model of Services Marketing Technology© Professor A. Parasuraman; not to be reproduced or disseminated without permission 26
  27. 27. An Important Implication of the Pyramid Model An organization’s ability to use technology effectively in marketing to and serving customers critically depends on the technology readiness of its customers and employees© Professor A. Parasuraman; not to be reproduced or disseminated without permission 27
  28. 28. What is Technology Readiness? Technology Readiness [TR] refers to ―people’s propensity to embrace and use new technologies for accomplishing goals in home life and at work‖© Professor A. Parasuraman; not to be reproduced or disseminated without permission 28
  29. 29. Drivers of Technology Readiness Contributors Optimism Innovativeness Technology Readiness Inhibitors Discomfort Insecurity© Professor A. Parasuraman; not to be reproduced or disseminated without permission 29
  30. 30. TR Scores by Dimension and Overall TRI* 4,5 4 3,5 3 Mean 2,5 TR 2 Scores 1,5 1 0,5 0 OPT INN DIS INS TRI 1999 . 2000 . 2001 2002 . 2004 . 2006 2007 2009*Data are for U.S.A.© Professor A. Parasuraman; not to be reproduced or disseminated without permission 30
  31. 31. Five TR-Based Customer Segments Optimism Innovative Discomfort Insecurity -ness Explorers High High Low Low Pioneers High High High High Skeptics Low Low Low Low Paranoids High Low High High Laggards Low Low High High© Professor A. Parasuraman; not to be reproduced or disseminated without permission 31
  32. 32. High-Tech versus High-Touch Customer Service High Explorers Appeal of High-Tech Service Channels Pioneers Skeptics Paranoids Laggards Low Low High Appeal of High-Touch Service Channels© Professor A. Parasuraman; not to be reproduced or disseminated without permission 32
  33. 33. An Important Implication of Technology Readiness To be effective, the implementation of any technology-based service innovation has to take into account the technology readiness of its intended users© Professor A. Parasuraman; not to be reproduced or disseminated without permission 33
  34. 34. Typology of Service Innovations Impact on Svc. Productivity: Co. Perspective Favorable Unfavorable Favorable Win-Win Unaffordable Impact on Svc. Productivity: Customer Perspective Unfavorable Short-sighted Dumb© Professor A. Parasuraman; not to be reproduced or disseminated without permission 34
  35. 35. Service Innovation Should Ideally Lead to Service Enhancements That:  Take into account customers’ service expectations (as well as their resources/capabilities)  Increase service productivity from both company and customer perspectives  Focus not only on developing completely new services but also on the process of service delivery© Professor A. Parasuraman; not to be reproduced or disseminated without permission 35
  36. 36. Evolution Required for Effective Service Enhancements Service Productivity Service Productivity Service Service Service Service Quality Innovation Quality Innovation© Professor A. Parasuraman; not to be reproduced or disseminated without permission 36
  37. 37. Critical Issues Worthy of Scholarly Research  Mathematical/analytical modeling of tradeoffs between the two conceptualizations of service productivity  Metrics for operationalizing input and output constructs embedded in the dual conceptualization of service productivity  Approaches for assessing and classifying service enhancements into the productivity-based typology  Refining the two-dimensional typology – e.g., by adding dimensions such as ―ease of resource transfer‖© Professor A. Parasuraman; not to be reproduced or disseminated without permission 37
  38. 38. Critical Issues Worthy of Scholarly Research (continued)  Exploring ways for fostering greater inter-functional collaboration—particularly among marketing, operations, human resources, and accounting/finance—when developing service innovations  Developing process innovations that focus specifically on improving the efficiency and effectiveness of service recovery© Professor A. Parasuraman; not to be reproduced or disseminated without permission 38
  39. 39. Sources of Additional Information www.technoreadymarketing.com© Professor A. Parasuraman; not to be reproduced or disseminated without permission 39
  40. 40. Sources of Additional Information Parasuraman, A. ―Service Productivity, Quality and Innovation: Implications for Service-Design Practice and Research,‖ International Journal of Quality and Service Sciences, Vol. 2, Issue 3, 2010, pp. 277-286.© Professor A. Parasuraman; not to be reproduced or disseminated without permission 40
  41. 41. Thank You!© Professor A. Parasuraman; not to be reproduced or disseminated without permission 41
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