A framework for strategic service management

Abstract

A service framework is needed to foster strategic thinking in services. This paper introduces the service process/service package matrix to meet that need. The important feature of the service process is the degree of customer influence on the service process. The unique characteristic of the service package is that it consists of both tangible and intangible aspects. The service package is described by the degree of customization found in those tangible and intangible elements. Strategic competencies are identified and discussed along the service process dimension, the service package dimension, and the main diagonal of the matrix. Some existing strategic frameworks are embedded and incorporated in the matrix. Additionally, we formulate research propositions based on the matrix. Service firms can use this matrix to gain strategic insights by aligning the type of service package offered with the type of process used to create the service and to have a better understanding of their service operations strategy. matrix (Schmenner, 1986). Each of these models, rich and insightful in some aspects, falls short in illuminating the complex strategic issues in service settings. This paper introduces a new conceptual framework, the service process/service package (SP/SP) matrix, designed specifically to address unique strategic issues found in service businesses. The SP/SP matrix links the service process structure with the service package structure, a feature that is missing in existing models. The service process structure features the customer influence on the service production and delivery process. The service package structure is described by the degree of customization of the service package. The use of the matrix allows service firms to gain strategic insights based on their position in the matrix. 0272-6963/95/$09.50 © 1995 Elsevier Science B.V. All rights reserved SSDI 0272-6963(95)00036-4

Process design principles in service firms: Universal or context dependent? A literature review and new research directions

“…It should be noted that the service concept is often described in the literature as the set of tangible and intangible elements that constitute the service offering (Sasser et al, 1978;Edvardsson and Olsson, 1996). Additionally, previous work suggests that the strategic alignment of the service concept with the service process is a prerequisite for improved performance (Heskett, 1987;Kellogg and Nie, 1995;Karwan and Markland, 2006). A study by Silvestro and Silvestro (2003) provides empirical evidence that failure to realise the alignment has a detrimental effect on performance.…”

“…Similarly, in a service operations environment the dominant paradigm advocates a contingency approach emphasising consistency between business strategy and service design to achieve high performance (Heskett, 1987;Kellogg and Nie, 1995;Silvestro, 1999;Goldstein et al, 2002;Roth and Menor, 2003). According to this literature, the design of the service process is driven by contextual factors, and a multitude of contextual variables have surfaced in OM.…”

“…The production-line approach to service process design states that in these contexts technology should substitute for people to maximise efficiency (Bowen and Youngdahl, 1998). As suggested by several authors (Wemmerloev, 1990;Kellogg and Nie, 1995), limited customer input variability and high task repeatability make processes selling standardised offerings more suited for automation than processes supporting customised service concepts. This resonates with Apte and Vepsäläinen (1993), who argue that standardised service concepts are best provided through technology-centred processes.…”

“…Providing customised services and developing long-term customer relationships are the defining characteristics of professional service firms (Silvestro, 1999). These organisations typically follow a focus strategy (Kellogg and Nie, 1995;Silvestro, 1999). Similarly, Buzacott (2000) points out that when customer-induced variability is high, significant decision-making authority is needed to evaluate whether the service offered can actually be delivered.…”

“…There is a broad consensus in the OM literature that employees should exercise virtually no decision-making authority in the context of the efficiency-oriented service factory (Schmenner 1986). Service factory processes usually deal with limited variability in customer inputs and support highly generic offerings (Kellogg and Nie, 1995;Silvestro, 1999). Finally, Kelley et al (1996) argue that standardised service concepts are typically provided through processes characterised by "routine" discretion.…”