Middle East Performance Measurement &

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• Middle East Performance Measurement
• Benchmarking Conference
• Challenges of Measurements
• in
• Service Industry
• 21st to 22nd June 2004, Dubai
• Sunil ThawaniManager TQM DepartmentUnion
  National Bank, Abu Dhabi
• Sthawani_at_unb.com

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Purpose of Presentation

• Concepts and unique features of Service Quality
• Service Quality model
• Causes of service quality problems
• Challenges of measurement in Service Quality
• Establishing service quality performance
  standards and Benchmarking.

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Service Industries

• Retailing
• Distribution
• Financial services banking, insurance
• Hotels and tourism
• Leisure, recreation, entertainment
• Professional and business services like
  accountancy, marketing, law, consulting
• Healthcare
• Software etc.

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Goods growth
Services growth
GDP growth

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Share of commercial services and goods in world
trade, 1980-2000
1980
2000
Services
19
81
Goods
6
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Service Industry - Facts

• Service industries generate over 2/3rd of GNP and
  employment in developed countries - ISSN Journal
  Volume 22, 2004)
• 9 out of 10 jobs are created by Services economy
  Delivering Service Quality by Valerie,
  Parsuraman and Leonard
• Of the top 100 revenue earners worldwide, 55 are
  service firms www.service-growth.com
• Top service firm in revenue worldwide Wal-Mart
  is a service firm
• Service firms produced 45 more revenue per
  employee than manufacturing firms

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Service Quality
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What Makes Service Quality Unique

• Service is intangible - it cannot be easily
  measured, tested and verified in advance of sales
  to assure quality
• Services are perishable
• Precise standards like manufacturing can rarely
  be set
• It is created and consumed simultaneously or near
  simultaneously Service Production and
  Consumption are often inseparable i.e. Customer
  is in service factory.

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What Makes Service Quality Unique

• Services offered can vary from Producer to
  Producer e.g. outlet to outlet
• Outcome of Service is as important as process of
  delivery assessment of quality is made during
  the service delivery process.
• Service Quality is more difficult for customer,
  to evaluate, than product quality
• Customer cannot retain the actual service. The
  effect of the service can be retained.

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• Service Quality Model

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Delivering Service Quality by Valerie,
Parsuraman and Leonard
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Service Quality Gap

• The gap between expected and perceived
• service is a measure of service quality
• Expectation gt Service perceived Exceptional
  Quality,
• Expectations lt Service perceived Unacceptable
  quality.
• Expectations Service perceived Satisfactory
  Quality.

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• Challenges of Measurements in Service Quality

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Definition of Dimensions
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Definition of Dimensions
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Dimension Measurements

• Reliability On time delivery performance,
  Errors in
• invoices
• Responsiveness Cycle time (speed)
• Access Availability (24x7), Downtime of web
• Credibility Financial Ratings, Image
• Mix of Performance Indicators and Perception
  Measures

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• Causes of Service Quality Gaps (Customer
  Dissatisfaction)

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Gap 1
Customer Expectations (Expected Service)

• Lack of Market Research Orientation
• Inadequate upward communication
• Too many levels of management

Managements Perception of Customer Expectations
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Gap 2
Management Perceptions of Customer Expectations

• Inadequate management commitment to Service
  Quality
• Perception of infeasibility
• Absence of goal setting

Service Quality Specifications
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Gap 3
Service Quality Specifications

• Role ambiguity
• Role conflict
• Poor technology
• Lack of team work
• Poor employee job fit

Service Delivery
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Gap 4
Service Delivery

• Propensity to over-promise
• Inadequate horizontal communication

External Communications to Customers
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Marketer
Word-of-mouth Communication
Past Experience
Personal Needs
Expected Service
GAP 5
Perceived Service
Service Delivery
External communication to consumers
GAP 1
GAP 3
GAP 4
Converting perceptions into service quality
specifications
GAP 2
Management perceptions of consumer expectations
Service Provider
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• Establishing Service Quality Performance Standards

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Performance Standards

• Qualitative
• Quantitative
• Benchmark (In line with Customer expectations).

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FedEx Service Quality Indicator(Quantitative)

• No. of damaged packages
• No. of lost packages
• Missed pickups
• Aircraft delays
• Reopened complaints (complaints not solved first
  time)
• Wrong day late deliveries
• Right day wrong delivery
• Abandoned calls
• Invoice adjustment requests
• Missing proof of deliveries.

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• Concluding Thoughts

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Challenges of Performance Measurements

• Deciding strategy - Customer satisfaction vs.
  Customer delight
• Developing Service Quality dimensions specific to
  business needs
• Defining the dimensions
• Developing common understanding throughout the
  organization - Achieving clear focus direction
• Establishing measurement framework
• Utilizing measurements
• Benchmark to set targets
• Aligning measurement techniques with the
  dimensions
• Addressing Service Quality Gaps.

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Quality/ Profit Relationship

Inferior
Superior
Relative Quality
Source Robert Buzell Bradley Gale, PIMS
Principle
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Conclusion

• Service excellence pays off richly
• Superior service quality is proving to be a
  winning competitive strategy
• Effective and appropriate Measurements can help
  achieve Service Excellence

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• Thank you
• Q A