Service Lifecycle Management (Subject) / Foundations of Service Management / ITSM Foundations (Service, Value) Foundation (Lesson)

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• Name three reasons for a transformation to services and explain them by pointing out 3 facts for each: Social Changes - More affluence - More people short of time - Increased desire for buying experiences versus things - Rising consumer ownership of high tech equipment - Immigration - Growing but aging population - Easier access to information   Business Trends - push and increase shareholder value - Emphasis on productivity and cost savings - Manufacturers add value through service and sell services - More strategic alliances and outsourcing - Focus on quality and customer satisfaction - Growth of franchising Marketing emphasis by nonprofits   Digitization - Ubiquitous connectivity & mobile devices - Internet of Things / Cyber-physical systems - Advances in analytics & automation Growing digital skills Cloud & Crowd 
• What does IHIP stand for? State the criteria, explain them and give an example for one of these criteria. - Intangibility o Difficult to evaluate the result upfront o Purchasing process takes more time o Price cannot be determined based on material cost o Quality not clear before finalized o Easy to copy and hard to protect o No transfer of ownership EXAMPLE: car (product) vs. consulting (service)                       - Heterogeneity o Low level of standardization o Difficult to compare o Lack of market transparency o Quality difficult to measure o Variations in customer perception EXAMPLE: customer expectations (influenced by price,marketing, previous experience, Word-of-mouth, alternatives available, customer’s mood, confidence) & perceptions   - Inseparability o Direct customer interaction throughout the whole process o Customer is part of the service delivery process o Customers understands what the supplier is doing o Allows individual solutions / behaviour o Correction during delivery is possible – and necessary EXAMPLE: customer is involved in service specification – customer is involved from the beginning but does not know the result before the end of the process   - Perishability o Cannot be produced in advance o Variations of volume cannot be buffered o Risk of unemployment o High fixed cost o No storage cost EXAMPLE: From Excess Demand to Excess Capacity
• What are the two aspects of value from customer’s perspective? Name and explain. - Utility o Fitness for purpose o What the customer receives o Utility increases the performance average   - Warranty o Fitness for use o How it is delivered o Warranty reduces the performance variation
• Which two aspects does value have from the customers point of view? - Fitness for purpose, which is utility (what the customer receives) - Fitness for use, which is warranty (how it is delivered) - Customers cannot benefit from something that is fit for purpose but not fit for use, and vice versa!"
• How is value created according to service logic compared to the goods logic? • According to the goods logic value is created in exchange. o The Provider produces a product or service which is then consumed by the customer and paid for. • According to the service logic value is created in context. o The Provider collaborates with the customer as co-creator of value. o The Provider creates a product depending on the interaction with the customer. - The Provider provides resources that support value creation.        - The value is determined by the context of use -> only the customer creates value!    

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