Creating Service Excellence (Indian Services Sector)

By
Prof. R.K. Gupta
Director
Sobhagya Consultancy & Marketing Services-India
Chandigarh
E-mail: rkgupta_india@rediffmail.com / cityju@rediffmail.com
 

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 21^st 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, 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.
E-mail: rkgupta_India @rediffmail.com
URL: www.geocities.com/rkgupta_india

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.
 

Prof. R.K. Gupta
Director
Sobhagya Consultancy & Marketing Services-India
Chandigarh
E-mail: rkgupta_india@rediffmail.com / cityju@rediffmail.com
 

Source : E-mail February 24, 2006

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