Below we will introduce a model, the Service Delivery System, which we have developed with inspiration from our own experience with Lean in service and administration and based on dialogues with top specialists from a number of different environments. As part of our suggestion for a holistic perspective on Service Operations which combines the outside-in and inside-out perspectives, another objective is to zoom in on the fundamental differences as regards operations in back office and front office environments. This may not be new. However, we experience that many companies find it challenging to coordinate optimisation of operations in back office functions – where stable operations are usually a mantra in order to reduce costs – with optimisation of operations in the front office – where flexibility in relation to highly individualised customer service is a mantra.
The challenge is to be capable of managing an effective interaction between two different operational environments in the same organisation and to be capable of delivering exactly the service experiences that have been designed for the customers.
A third objective of this article is to describe how optimisation in the operations organisation must be approached in different manners, depending on whether it concerns optimisation of a process – such as handling a claim in an insurance company – or local optimisation of a function handling a number of different tasks – e.g. a customer service centre or a finance department. Here, we distinguish between horizontal optimisation (process) and vertical handling (a local functional unit).
We consider this article a contribution in the debate on Service Operations and continuous optimisation in service companies. We admit that we have set out to deal with quite an extensive subject area and have prioritised to take a holistic perspective rather than going into details. In this manner, we hope that we can inspire and challenge, even though we do not in any way provide all the answers, and even though the individual elements of the whole, to a large extent, will be known in advance.
The article is structured in three main sections:
- An introduction to Service Operations as a concept and to the holistic model for the Service Delivery System that we launch as a frame of reference for optimisation in service companies.
- A suggestion for four complementary approaches to service optimisation which together may be employed for creating significant improvements in service companies: service design, process optimisation, local optimisation of operations and organisational structure.
- A perspective on the strategic potential of devoting considerable efforts into optimisation of Service Operations
An important delimitation in this article is that we do not go into the strategic choices that precede the prioritisation of specific approaches and tools. We implicitly assume that the majority of organisations aim for efficient operations, high customer service and positive customer experiences in a suitable balance depending on the organisation’s strategic context.
Introduction to Service Operations
Through our work with Lean in service organisations, we have acknowledged the need for a more general frame of reference in relation to optimising operations in service companies. This has crystallised into a model for the Service Delivery System (see figure below). The model is inspired by Service Operations specialists such as Robert Johnston (author of Service Operations Management and Thomas Bøhm Christiansen (co-author of Lean – Implementering i danske virksomheder (Lean – Implementation in Danish companies)) as well as specialists from the marketing industry, among others Søren Bechmann (author of Servicedesign (Service Design)).