ITM345
IT
Applications in Service Operations
(For
CNM Cases)
Assignment - I
Assignment
Code: 2016ITM345A1 Last Date of Submission: 30th
April 2016
Maximum Marks:
100
Attempt all the questions. All the
questions are compulsory and carry equal marks.
Section-A
1. How
do such concepts as TQM, ISO 9000, Malcolm-Baldrige Approach, and Six Sigma relate to managing and improving productivity
and service quality?
2. Discuss
the application of information technology in service operations
3. What
do you understand by service operations? Explain with examples.
4. (a) What
are the key drivers for increasing globalization of services?
(b) How
does the nature of the service affect the opportunities for globalization?
Section-B
Case Study: Pay Only if Delivered
Sunny and his wife Rekha both had
degrees in hotel management, with specialization in catering and hospitality,
respectively. Both were working at Host,
a restaurant located in a busy business area.
The area had the stock exchange and offices of many companies in India
including reputed business houses, business and financial consultants, and
multinationals. The area was known as
the financial district of the city.
Sunny and Rekha were keen on starting
an enterprise of their own and were looking for the right business
opportunity. At Host, Sunny was working
in the restaurant and Rekha was supervising the dining area and was handling
customer relations, billing and the cash register. So, between the two of them, they had the
required experience in almost all the functions to run a food business.
Rekha had observed that most of the
guests coming for lunch to the Host were investors, stock brokers and bankers,
and their business operations were concentrated at the stock exchange. Since the lunch break was only for half an
hour, they could not afford to be out of their business premises for a long
time. Sunny and Rekha once visited the
stock exchange to study the workplace of their guests and realized how hard
pressed they were for time. They were convinced that if they could offer these
customers an appealing lunch at their workplace, they would certainly develop a
good clientele. The customers would be
able to relish their lunch, as they would get more time for eating.
They started talking to a select list
of potential customers about the service they were planning to introduce. They found that their concept was liked by most
of them. A demand for onsite food
service was established. Sunny and Rekha
worked on the economies of this service and came to the conclusion that they
could build a very profitable business.
So, they decided to quit their jobs and start the on site food delivery
service.
The focus of the service was ‘quality
food delivered on time’. The operational
strategy was very simple, but focused.
They practiced the following service procedure:
The customers would order their food by
10 a.m. and indicate the time when they wanted the delivery.
The delivery time was fixed at 11
a.m. So, all food had to be filled,
packed, labeled and sorted out by 11 a.m.
The delivery boys had to report at 11 a.m.
to pick up their packs. The delivery
boys were selected on the basis of their location in the customer area, their
knowledge of the topography, and distribution skills.
The client base of 70 people, located
at seven different places, was served by seven delivery boys, with each
handling 10 customers whose offices were located either in the same building or
in the immediate vicinity. The
distribution strategy and mode was designed on the basis of client dispersion
in the segment.
Their work-study had indicated that
each delivery boy would deliver the food and return the empty cases within one
and half hours form the start of service.
The kitchen was located five kilometers away form the business offices.
In the same area, there were four other
organizations that more providing a similar food delivery service and Sunny and
Rekha had to compete with them. Being a
new entrant, they had to have a clear-cut strategy to gain a competitive
edge. They decided to adopt a pro-active
strategy. They started providing a
service guarantee, stating, ‘Not delivered as promised – don’t pay for it.’
Their main focus was speed of services (SOS) and delivery on time.
As a result of the service guarantee
and its fulfillment, their service acquired the reputation of accessibility,
reliability and responsiveness. More and
more customers were willing to enroll themselves as regular members for this
service. The other suppliers in the same
area were not willing to match the service and the guarantee. Their customers started leaving them. This helped Sunny and Rekha to consolidate
their business.
The increased flow of customers was
inducing Sunny and Rekha to expand the business. The collective experience of both also
convinced them to go ahead for expansion and enter to the larger segment they
had identified and they were confident of further success.
Case Questions:
5. a. Identify the core
and supplementary services in the above case. Elaborate on their importance.
b. “Identification
of customer need is the key for success
in services sector” Justify this
statement in light of the case.
c. What
can be the
possible drawback of using service strategy such as “Not delivered as promised, don’t pay for it”?
ITM345
IT
Applications in Service Operations
(For CNM Cases)
Assignment - II
Assignment
Code: 2016ITM345A2 Last Date of Submission: 30th
April 2016
Maximum Marks: 100
Attempt all the questions. All the
questions are compulsory and carry equal marks.
Section-A
1. Comment
on usefulness of queing theory to service organizations. Discuss the applicability of a queing model to a
collage library.
2. Explain
the SERVQUAL model for measuring the service quality. How does it help marketers to deliver quality
service?
3. What
does “inventory” mean for service firms and why it is perishable?
4. (a)
What gaps can occur in service
quality and what steps can service marketers take
to
prevent them?
(b)
Explain how can use of technology
help in reducing these gaps.
Section-B
Case Study
Ericsson,
the largest supplier of mobile systems in the world, was facing changing market
conditions that prompted management to review the operational model and
transform the processes supporting its business.
Technical challenges with availability of (3G) third generation services, and the resultant volatility in the market, led to many operators postponing investment in 3G infrastructures or slowing down development of 2G networks. Almost overnight, the market went from having been very exuberant to becoming highly conservative.
Ericsson’s innovative role, at the heart of an industry allowing operators to provide mobile Internet services like video clips and high-speed access, was under threat. And Ericsson’s sales were in the front line of attack! Ericsson’s very survival hinged on a business model that needed to be highly adaptive and flexible to be able to face the challenges head-on.
Ericsson
announced strategic decisions that would affect both its business and
operations and forge a path to return to profitability. A core element was to
consolidate non-core activities of local companies to a standard platform. A
study across the region Europe, the Middle East and Asia (EMEA) revealed underlying
processes for Finance & Administration and Purchase-to-Pay characterized by
Standard Global Applications. Having already derived substantial process cost
reduction, the Business Support Centre (BSC) facilitates a blueprint to
transform Ericsson’s support processes, world-wide.
Ericsson
EMEA decided to consolidate activities in both process areas and to re-engineer
ways of working. A key element of the strategy was to establish a BSC for
Western European countries to facilitate: service efficiency and productivity
to derive substantial process cost reduction, quality, consistency and
transparency in business processes and information, Organizational flexibility
to establish a change agent to drive standards.
The
decision, affecting local companies in 17 countries, demanded one of the
biggest transformations in Ericsson’s long history. Recognizing the value of
partnership, Ericsson started looking for a range of skills, in strength and
depth, in a partner. Capgemini had a global profile coupled with local presence
in affected markets and expertise in process and technology consulting.
Capgemini won the confidence of Ericsson management to assist with the design,
set-up and operation of a BSC for Finance. With credentials of Shared Services
projects in complex global organizational structures, Capgemini was selected as
business partner to help Ericsson design and implement the BSC initiative.
The BSC
would provide Shared Services to involved businesses, re-engineer and
standardize business processes, and support deployment of global, enabling
business applications. Capgemini led the strategic visioning phase. The target
market was for in-scope services in Ericsson’s EMEA organization with initial
customers being Market Units in Western Europe. Ericsson decided to standardize
in-scope systems and processes and integrate them into a common Market Unit
Solution (MUS) based on SAP R/3, and incorporating an eProcurement solution to
facilitate a seamless Purchase-to-Pay (eP2P) process. Capgemini co-ordinated
the design of the BSC service delivery model with functions consolidated in
four hubs. During the set-up phase, it was decided to consolidate in two hubs
across three locations serving the 17 countries, with each hub organized in a
matrix structure. Process-oriented teams would provide the services, with
Service Managers assigned to Market Units managing customer relationships. The
model facilitated front-office culture in the back-office.
Experts
from Ericsson and Capgemini collaborated in a single, cohesive team to derive a
current state analysis. Based on information gathered, the team refined the
Business Case, developed the service scope in detail and designed a
future-state organization. Service Level Agreements (SLAs) were established
after negotiation with demand managers of hub countries. Within six months of
project start, the BSC was formally established.
For
customer units in hub countries, the BSC commenced service delivery from Day
One with existing staff transferring to the new entity. Transition activities
focused on achieving a change of mindset towards a service centre culture. The
team derived a baseline against actual performance, refined SLAs and set new
performance targets.
For
customer units in other countries, all aspects - service migration, people and
system transition - had to be considered. Strong relationships with local
management were critical to address the people issue, a key challenge of major
transformation programmes. Effective change management at a local level
facilitated awareness of the strategy and its impact, and secured buy-in.
The
migration strategy of the collaborative team linked service migration to
implementation of the MUS and eP2P. The BSC would become responsible for
service delivery at a defined stage prior to system implementation and manage
the process in-situ. A local management team in each country was responsible to
secure sponsorship, plan the migration, manage change and support
communication. Service migration was organized using a consistent methodology.
Key tasks were adaptation of future-state processes, recruit and train new
hub-based staff, knowledge transfer, cutover to hub and post-migration support.
Each deployment was managed as a project via defined ‘tollgates’ and supported
by steering groups. Readiness was jointly agreed by the BSC and local companies
based on pre-defined criterions.
Capgemini
supported the BSC local service management in all countries. It also managed
the first large-scale service migration to set the stage for subsequent rollouts.
With transitions for remaining countries complete, the BSC turned its attention
to stabilize services, optimize resource utilization and bed down all elements
of a Service Management Framework. Service Managers now deliver services to
each customer according to agreed principles and procedures. The BSC programme
delivers standard systems and processes to support Market Units in Western
Europe, thus helping Ericsson to re-establish its profitability.
Benefits
include direct reduction of process costs managed by the BSC - about 30% in
Finance and Administration, as well as in Purchase-to-Pay, service
consolidation deriving process and systems standardization, process-oriented
teams focused on service efficiency to facilitate continuous improvement,
Organizational flexibility to changing business priorities, allowing Ericsson
to adapt its shared service model without compromising stability and competency
levels.
One
example of the benefit was evident during the first year-end closure following
the launch, when the BSC successfully managed 14 countries via a common systems
platform and controlling area. The result was on-time service delivery at high
quality.
The BSC
has initiated several improvement projects that have been adopted at group
level. With its cross-border service orientation, the BSC has enabled Ericsson
to drive changes in support processes and thought leadership in local
companies. Management is confident that the worldwide transformation of
Ericsson’s support processes has started in earnest via a proven model of
Shared Services. Effective partnership with Capgemini has helped Ericsson to
face challenges in a volatile environment.
Case Questions:
5. a. “Ericsson, the largest supplier of mobile
systems in the
world, was facing changing
market conditions that prompted management to review
the operational
model and transform the processes
supporting its business.” Explain the
steps carried out by Ericsson in transforming the processes supporting its business.
b. “Ericsson was facing challenges
from changing market conditions.” In this regard, analyze
and suggest the various approaches of strategic positioning.
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