Service Blueprinting as a Failure Elimination Tool in the Case of Outsourcing Services

Introduction

Outsourcing is an important trend across the industries (Deepen, 2007; McIvor, 2005) and it represents a major source of new service activities. Outsourcing refers to the sourcing of goods and services previously produced internally within the sourcing organisation from external suppliers (Kehal & Sing, 2006; McIvor, 2005). Outsourcing is not only a straightforward financial or purchasing decision for the organisation. In many cases, outsourcing constitutes a major strategic decision that has implications for the entire organisation (McIvor, 2005). It often involves also the transfer of both people and physical assets from the client organisation to the service supplier. In addition to trimming of manufacturing costs, there are several other reasons that can be recognised as drivers of outsourcing. These include increasingly demanding customers, advances in technology and new forms of competition (Bitner et al., 2000; de Brentani, 1995; Lovelock et al., 2001; Wymbs, 2000) that are driving the development of innovative outsourcing services. It is argued (Fähnrich & Meiren, 2007) that differentiation through innovative service offering is developing into a unique key selling point that can distinguish manufacturers from their competitors. At the same time, many businesses realise that their present structures and processes are not ideal for developing new services efficiently and positioning them in the marketplace (Fähnrich & Meiren, 2007). Typically the roots of such difficulties are related to the fact that the services offered by the suppliers are not clearly defined on the basis of client needs, and there are no clear descriptions of what the service entails or of the relevant processes and the resources required (Bullinger et al., 2003).

This paper provides new insights into the discussion on new service development in the outsourcing context. It outlines a systematic way to define and describe the service provision process in the case of outsourced industrial services. In particular, it identifies and analyses critical points of failure in the outsourcing service process and proposes improvements accordingly. Although the paper is written from a service provider’s perspective, customer viewpoints are essential in drawing conclusions from and clarifying empirical implications of the analysis.

Complexity of industrial outsourcing services provides a fertile ground for the utilisation of different types of tools and methods in the process development. In this paper the service provision process in the context of industrial outsourcing is described and analysed systematically with the help of the service blueprinting method originally introduced by Shostack in 1984. Essentially service blueprinting is an analytical visualisation tool for service concepts and processes and, therefore, it provides a solid basis for process development that takes customers’ as well as service providers’ perspectives and interests into consideration (Fliess, 2006). It portrays the service system and its processes chronologically by depicting each step of the service delivery and the activities in the customer-contact points as well as backstage activities and further supporting service elements (Shostack, 1992; Lovelock & Wright, 2002). Blueprinting is capable to structure all activities of the service process according to their degree of customer proximity and customer integration or the degree of co-production (Bowen, 1996; Grönroos, 1990). Such new knowledge helps a service provider to develop the existing processes and their competitive positioning on the marketplace.