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Creating Service Excellence (Indian services sector)
Prof.
R. K. Gupta
Overview of Services
58% of Indian GDP now comes
from Services sector and large FDI has started flowing into
this sector in India. IT/ITES appears to be largest and fastest
growing services sector with estimated revenue of $34 Billion
this year. However Indian economy has largely been regulated
from time of independence till 1995, a few years after official
milestone of economic liberalization in country of 1991. The
undersigned having worked as senior functionary in Indian
corporate sector in medium and large organizations in both Public
and Private sector minutely observed various phases of regulation,
deregulation, opening up of various sectors and the mindset of
various entrepreneurs from different ethnic/community background
and education. This environment is complex and has bearing on
success of services excellence efforts.
In recent speech at Asia Society
in Washington, the President Bush clearly spelt out advantages of
outsourcing to India defending movement of service jobs
offshore to India from US and many other western countries (one of
the four modes of service delivery).
Some of key features need to be
addressed in Indian services sector business are:
1.Attitude towards employees,
their compensation, reasonable job stability (I wont call any more
security). Even now a good part of Indian business treats employee
like hat from regulate manufacturing system based on quotas and
permits. Human resource is still considered as one of factors of
production and most unwelcome and of least value as a factor.
2.Attitude to customer is also
indifferent and casual having same mindset of regulated rationed
economic development with shortages and Public Distribution order.
Thus neglecting very essential difference in services and
manufacturing sector that the former passes on intangible benefits
and is based on personal relationship, service attitude and
intense people processes. Creating credibility of services
offering and post sales service guarantee are major challenges
3.Need for change to develop a
global attitude in operations and marketing in services (World
class operations and marketing).
4.Market forces and economics,
rather than ideology will drive the 21st century.
5. Large amount of funds are
required in infrastructure growth and capital assets required for
various sectors like Hospitals, Hotels, Roads, Airports and
Tourism packages. These required investments can be mobilized by
encouraging FDI.
6. Focus on marketing backed by
ITES technology for netter marketing and customer care, an
important component in services marketing
As compared to China, India has
distinct advantages in services competencies based on inherent
Indian cultural system and genes (For example-Traditional
hospitality of Rajasthan and its majestic past make it a distinct
place for Heritage and Conventional tourism} and high IQ and
English speaking erstwhile British colony. For example, Indian
origin nurses are considered one of the best in world markets,
particularly UK and US. US government has separate class of Visa
for Nurses. It is also true for priests and ITES too.
India can become important services
outsourcing center providing both know-how and export of trained
personnel (Refer Four types of services classification in GATS)
Healthcare is one of important
sector, which India can tap both offshore and by way of exporting
skilled Medicare personnel. In USA alone the 8% of GDP on health
care will rise to 18% or so due to rising population of senior
citizens and the same is also true in Japan.
However there is a catch to it. In
blind temptation for profits and dollars revenue Indian domestic
health sector may suffer badly with medical care out of reach of
common man being costly and the public infrastructure poorly
developed. I think already the cost of medicines and health care
services have rapidly escalated in past few years time. This is of
serious concern. The insurance companies are not providing
properly designed and customer oriented products but are also
unwilling to issue even Individual’s Hospitalization policies
due to alleged accumulated losses. This aspect of balanced growth
between Domestic and Export markets, Agriculture vs.
Tourism and Manufacturing vs. Services needs to
be paid attention to.
Any planning for boosting services
exports without strong and well developed domestic market may have
serious consequences in long run and not sustainable.
The Key labor wage differential
and high education level of English speaking Indians can be
leveraged for sectors like R &D outsourcing. Moving
high up in value chain is imperative for Indians services
industry in a few years time, as other nations including China
will be catching up with us fast.
Nature of services
A quick review of nature and scope of
services marketing would be in order to derive strategic steps
needed in delivering service excellence.
Services can be classified as:
Pure service (Baby-sitting, legal
services), Derived service (Repairs and maintenance) and Value
added service (Financing, System Integration)
These can also be classified as:
Personalized services (Hair dresser),
Substitutable services (Tax consultancy, accountancy) and
explosive (Telecom network)
Another important feature of service
delivery is through Front office-Back office concept (TV programs,
restaurant or Hospital)
I am afraid few Indian
entrepreneurs have developed mindset of service to consumer as
they have been long exposed to manufacturing under restrictive
license regime and regulated supplier driven markets.
How Service Industry is different from Manufacturing Sector
Dimension
Manufacturing
Services
Objective
Transaction
Relationship
Focus
Buyer
User
Strategy
Acquisition
Retention
Organization
Product Centric
Account Centric
Processes
Non Interactive
Highly interactive
Infrastructure
Machines based
People based
(Atomization possible)
Measurement
Market
share
Share of customer business
Need for Customer
Information
Moderate-High High and
continuous
Employee
Empowerment
Varies
Always high
Communication skills moderate
High
While atomization is catching
up but it has been found to be deficient in terms of
accessibility, flexibility and personalization effect. One example
is automated call centers and help lines (Toll free numbers
included).
Success factors in Services
excellence can be grouped as:
Performance Value
Quality Obsession
through Six sigma, HR competencies and Internal marketing
Services
Guarantees- satisfaction & Performance guarantee, on time
delivery and extended service contract adding value in offering
like auto financing
Tangibility through
creating service ICONS, spokes persons and ambience or Servicescape.
Management of
service delivery failure
Price Value
Standardization
through faster and reliable service (home catering of Mac Burgers
and Dominos). Well designed and looked after tours and cruises and
hospitality industry
Time and Location
based pricing – Like home delivery vs. in-store, air ticketing
and stock markets
Value based
segmentation- Frequent flyer programs of airlines, Key accounts
management, Customer lifetime value
Personalization Value
Mass
personalization
Professionalism and
competence
Frontline
information system and
through the web
Ongoing feedback
from customers and innovation
Requirements for Becoming Globally Competitive
Domain
Expertise (Example- Financial and banking packages from Indian IT
Companies)
Creating service
culture in whole organization
Glocal Competence
(Mc Donald’s Localization in Global operations)
Career Orientation
and not jobs (Call centers)
Strong training and
certification programs (Balanced scorecard approach, Corporate
Entrepreneurship approach)
Services Quality
certification (International certifications like Malcolm Balridge
model, ISO 9000, EQA)
Information
Infrastructure
Process Driven
operations
Scale efficiency
Customization
within scale efficiencies
Continuous
Innovation
Service Excellence
Excellence can
be defined as the quality or state of being outstanding or
superior
Since customer have
rising threshold of satisfaction levels and hence excellence.
Excellence will
deliver memorable personal experiences including customer Delight
(significantly beyond expectation of customer, positively
outrageous, unexpected and random) Delight is when customer says
“Wow” experiencing a positive emotional gap than expected. It
is like moving from Must to satisfiers to Delight chain.
What is important
is First, to believe genuinely in customer delight and service as
a goal of organization, which is only possible by Top management
support and then go on and train and empower employees right from
front desk and beyond. Selection of right attitude employees is
must backed by database and technology systems.
The key control
points in service chain right from first contact point of a
customer to after sales guarantee have to be identified and the
systems of monitoring and improvements around them has to be built
for leading to service quality and delight.
Since it is often
difficult to standardize pricing in personalized need for services
products and customer is not able to find value of the service
product- reliability, loyalty programs, credibility and efficiency
of service providers (Services Triangle – Valerie, et al) is
vital for ensuring service excellence.
It is pity that
several top service organizations in India in various sectors like
share registry and brokerage, insurance higher education, medical
care and public services are far from abovementioned quality
components for excellence. Some of the
reasons seen are: Poorly designed processes, ill-trained
and overworked staff with unachievable targets and general lack of
service attitude. Similar, is the situation in after sales service
of manufactured goods and call-center systems in India that need
to be addressed seriously.
In services as well as manufactured
goods it is the value delivery and communication of this value
proposition to customer is very important for growth and
profitability. It would always be rewarding for organizations to
develop the evaluation criteria by which customer can judge and
appreciate the value. This is one area, which needs well-designed
systems and communication with customer. In multi-ethnic, multi
religion and multi lingual society like in India it is quite
daunting and challenging for creating such components of service
excellence.
About Author
Prof RK Gupta
is Director, S A Jain Institute of Management &
Technology Ambala City and Director- Sobhagya Consultancy &
Marketing Services – India (SCMS India) and has worked as
senior corporate executive and Management Professor over last 30
years in India >he is also Hony President –Forum for
enforcement of Civil Liberties-India (India FORCE), a
Voluntary organization focusing on consumer rights and education,
environment and civil rights with international membership from
over 17 countries.
Prof R K Gupta
Professor and Director
S A Jain Institute of Management & Technology
Ambala City
Email:
rkgupta_India @rediffmail.com
URL: www.geocities.com/rkgupta_indi
Acknowledgements:
Some of the material and ideas are
based on presentation of eminent scholars like Prof Jagdish Seth,
Prof Shyam S Lodha and Dr Mahmood A Khan working in USA
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