In the service industries it’s crucial to be better than your competitors - knowing what might lie ahead is key to continuing success
From designing just the product, companies are moving towards designing the product, process and service interface and moving towards 'whole life design' as a method for adding value and maximising profit throughout the value chain right through to disposal. This places a greater emphasis on the post-production stage of products, distribution, marketing, customer and market support - the service end of the process - as well as corporate development. As a result, more emphasis will be applied to service design.
There is a general increase in customer demand for continuously improving quality in services ('kaizen' - a Japanese concept of continuous small improvements). Quality starts with design and quality needs to be built into the design of the service provision rather than being added later. The application of tools such as SERVQUAL is an attempt to match (or exceed) service provision with customer expectations. SERVQUAL is a method devised by Zeithaml, Parasuraman and Berry which measures the difference between customers' minimum expectations and their perceptions of those services as delivered, focusing on five customer-valued 'dimensions' of service.
Most services still cannot be exported (or imported). The increase in the power and availability of information technology and ease of communication and other technological advances are changing this. It is now possible to operate services across borders and continents and this growing trend will continue.
For example, insurance and telephone banking can easily operate across the Atlantic. Many companies are moving their call centres to places like India where, although set-up costs are high, running costs are lower and staff tend to be better qualified. It has been estimated that up to one million British-based jobs could be at risk through this trend. This opens up new threats and some service companies will become vulnerable to overseas competition. But this also creates business opportunities for home-based service organisations to 'attack' overseas markets.
As a result, a 'worldwide' dimension needs to be considered in the specification of new service designs. This will include potential threats and opportunities.
More new technology will be used in services. This will make transactions faster, more efficient and more repeatable. The repeatability will make it easier to control and increase the quality of the service.
The standardisation brought about by the application of technology may reduce the personal interaction and thus the 'individual' nature of services. The 'service' dimension could be lost from the service transaction and that may not be to the satisfaction of all customers. The difference in the bespoke nature of some services compared with others (eg the difference between a restaurant and a fast food outlet) will result in both types of service being available. The segmentation choices will be part of the service design.
On the other hand, further application of advanced technology and IT in services can allow the benefits of apparent individualised service to be combined with the benefits that can be achieved with repeatability and 'selective' standardisation. It can also allow the service providers to spend more time with customers.
General economic prosperity and smaller family sizes have contributed to the growth of services. Higher disposable incomes have led to an increase in financial services, entertainment, eating out, travel, personal healthcare and fitness. This has resulted in more discerning consumers who are less likely to tolerate poor service provision. It is also likely that more businesses will see the benefits that service design can bring to their service offering, particularly within the legal and healthcare sectors.
There are stand-alone services but most manufactured products also contain a large service element on which the product will be judged. Even in manufacturing organisations it is estimated that 20% of employees are working in a service role.
To summarise:
- There is a growing international market for services
- A larger range of organisations including the legal system and the health service will begin to apply aspects of service design
- There will be an increasing reliance on technology and automation
- There will be a greater customer emphasis on quality
- The importance of the service sector in terms of profit and employment will continue to grow throughout the world