Significance of Qualitative Factors for a Deeper Understanding of Service Productivity

Significance of Qualitative Factors for a Deeper Understanding of Service Productivity

Sabrina Cocca (Fraunhofer Institute for Industrial Engineering, Stuttgart, Germany)
DOI: 10.4018/jssmet.2013040104
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Abstract

Analysing and optimising service productivity is a widely discussed task in service management. While directly measurable factors such as processing time or service turnover are frequently used in order to measure the productivity of services, underlying factors that are, in many cases, not (directly) measurable are not considered in-depth. However, these “qualitative” factors influence service productivity to a high degree. The idea behind the approach provided in this article is to open the former “black box” view on productivity (input–output) to a process efficiency-oriented perspective instead and to show which qualitative factors play a crucial role regarding service productivity.
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1. Introductory Remarks On Service Productivity And Qualitative Factors

Measuring and optimising service productivity is important for today’s companies in order to achieve and maintain economic efficiency. Service delivery exhibits specific characteristics differentiating it from manufacturing goods: most of all immateriality and integrativity, and the processes of service provision and delivery coincide temporally (uno-actu principle). On the one hand, the motivation for this article and the underlying research work comes from the finding that traditional research on productivity concentrates on quantifiable parameters that can be expressed in key performance indicators (KPIs), emanating from the classic productivity definition “productivity is output divided by input”. On the other hand, it became clear that approaches that also consider not (directly) quantifiable factors (“soft” or qualitative factors) are fragmentary and high-level, never covering all relevant aspects of services nor taking into account different service types. Furthermore, the traditional triad of productivity, efficiency and effectiveness limits the relation of output and input to the productivity concept, the process view to the efficiency concept, and the outcome to the effectiveness concept – to put it simply. There are four process steps in services: first, the input (e.g. company resources, employees’ skills) is transformed to an output within the service delivery process; second, the output becomes the outcome perceived by customers as satisfactory or not (effectiveness); third, the service process dimension is, to some degree, directly experienced by customers (external factor). Fourth, the external factor is an additional source of inputs that flow into service processes influencing the efficiency, the output, and the outcome. These four arguments suggest a rather holistic view of service productivity; considered in this context in a broader sense than productivity in the above-mentioned triad, along with efficiency and effectiveness. It could be said that it makes sense to open the “black box” in the pure input-output view of productivity and to integrate the component of effectiveness, including concepts such as customer satisfaction. Furthermore, in order to be able to optimise (quantifiable as well as not directly quantifiable) factors impacting service productivity, the consideration and closer examination of these factors is seen as an important prerequisite for creating high-productive services.

Relationship marketing, as a discipline of service research, quite early emphasised loyalty, customer retention, and long-term relationships as key drivers to profitability, strongly linked to quality and productivity (Gummesson, 1998). None of these factors can be measured directly, thus representing qualitative factors in the sense of this article. But they impact service productivity to a high degree, which mainly comes from the difference between service production and goods manufacturing (e.g. ibid.). In services, the actual value is produced simultaneously to the use of it (“uno-actu principle”), and the service encounter represents a key aspect in the delivery process, in many cases dominated by “humanness” (service staff interacts with customers). This peculiarity in services requires a different approach to productivity measurement, emphasising qualitative factors – not only in the sense of objectively determined quality (e.g. service must be delivered within two business days), but more concerning “soft” factors that cannot be defined and modelled as easily as input and output factors in technical processes (e.g. factors influencing interaction settings, or depending on individual characteristics and skills of persons).

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