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1.4

Service operations management is the term that is used to cover the activities, decisions and responsibilities of operations managers in service organisations. It is concerned with provid-ing services, and value, to customers or users, ensurprovid-ing they get the right experiences and the desired outcomes. It involves understanding the needs of the customers, managing the service processes, ensuring the organisation’s objectives are met, while also paying attention to the continual improvement of the services. Operations managers are responsible for most of an organisation’s assets, for managing most costs and staff and for generating the organisa-tion’s revenues. As such, operations management is a central organisational function and one that is critical to organisational success.

Service operations managers are often called operations managers but many other titles are used, such as managing partners in consultancy fi rms, nursing managers in hospitals, headteachers in schools, fl eet managers in transport companies, call centre managers, cus-tomer service managers, restaurant managers . . . They may be responsible for managing ‘front offi ce’ operations – the parts of the process that a customer might see, or the ‘back offi ce’

operations invisible to the customer, or indeed both. The back offi ce operation on the exotic island of Baros in the Maldives (see Case Example 1.3 ) involves a wide range of activities such

as water treatment plants, laundry, catering etc., all hidden from the guests’ view. The front offi ce operations include restaurants, accommodation and watersports. Ahmed Jihad is the operations manager with overall responsibility for both the back and front offi ce operations.

All operations managers have a number of things in common:

● They are responsible for the service operation – the confi guration of resources and

processes that provide service for the customer (see Figure 1.1 ).

● They are responsible for some of the organisation’s resources (we refer to these as inputs – see Figure 1.1 ), including materials, equipment, staff, technology and facilities. These re-sources often account for a very large proportion of an organisation’s total assets, so service operations managers are responsible for much of an organisation’s cost base.

● They are responsible for the organisation’s customers (sometimes referred to as clients, users, patients or students, for example) and/or the things belonging to their customers, such as their parcels or orders.

● They are responsible for ‘processing’ their customers or their parcels or orders. For the managing partner in a consultancy fi rm this might involve overseeing meetings with cli-ents, data gathering, analysis and report writing. For the nursing manager it might involve overseeing patient admissions, tests, treatment and discharge. (The service process is the set of activities or steps in the provision of the service.)

● They are also responsible for the outputs; the ‘products’ provided to their customers. The nursing manager delivers (discharges) recovering patients together with their prescrip-tions for medicines and outpatient appointments. The managing partner delivers the fi nal report and the solution to a problem to the client.

● They are responsible for designing, creating and providing the right experience and out-comes for their customers. The nursing manager will be concerned to ensure the patient feels well cared for and leaves in a better condition than how they came in. The managing partner will want their clients to feel informed, assured and valued, and provide them with some real business benefi ts.

● They are responsible for delivering value to their customers and also to the organisation.

Value to the customers comes from their experiences and the benefi ts gained. Value for the organisation comes from operations managers keeping to budgets, delivering revenue, reducing costs and delivering the organisation’s strategy, for example.

● Service operations managers are responsible for generating most, if not all, of an organisa-tion’s revenue/income and managing most of its assets and staff.

The Republic of the Maldives is a small country lying 700 kilometres south-west of Sri Lanka in the Indian Ocean. It consists of over 1,000 small islands grouped together in atolls. Spread over an area of about 90,000 square kilometres, this coun-try stretches from the equator to 1,000 kilometres north, yet it has a total land mass of less than 470 square kilometres. With its coral reefs, white sandy beaches and a climate of between 28 and 32 de-grees it is a holiday paradise and a destination for the affl uent traveller.

The tiny island of Baros is a fi ve-star de luxe resort, owned and operated by Universal Resorts

Case Example 1.3

which run eight secluded island resorts in the Maldives, Seychelles and Sri Lanka. Baros is just a 25-minute speedboat ride from the island airport which is close to the main island containing the capital Malé. Guests are met in the airport and escorted to the resort’s awaiting boat.

There are just 75 luxury villas on the island. Some are beach villas, sheltered and secluded in lush tropical vegetation, with direct access to the beach. Other villas are water villas, built above the water, each with their own private balcony and sea view. All the villas are spacious and air-conditioned. The resort has its own spa, diving and snorkelling centre, gym, bars and three restaurants, including the famous Lighthouse Restaurant.

In charge of all back offi ce and front offi ce operations is Ahmed Jihad, a Maldivian with international experience in hotel management. From the point of view of the guests the place is stunning, peaceful and quiet and their expectations are well met, if not exceeded. Although Baros looks the perfect posting for an operations manager, Mr Jihad explained that there was a lot of hard work behind the scenes.

We have to manage around 275 staff looking after our 100–150 guests. The operation never stops; it is 24 hours a day, 7 days a week. We have to make sure everyone has the energy and the motivation to keep our high standards, every hour, every day. We have to keep the place, all the wooden decks, furniture, the thatched roofs, looking in pristine condition. We also have a signifi cant logistical operation as all our supplies are brought in by air then by boat. There is also a considerable back offi ce operation which our guests don’t see, or even think about.

Most of the back offi ce operations are hidden away in the centre of the island overseen by the resort man-ager and the chief engineer. As there are no utilities to the island the resort has to generate its own electricity, run a desalination water treatment plant, an electricity generating plant and a sewerage treatment plant. It also has to provide all the facilities, including accommodation, for its staff.

Mr Jihad explained:

Baros is the real essence of the Maldives. It has a natural beauty, white sands, reefs, the lagoon, and a high customer profi le – people with very high expectations. My main responsibility is the front offi ce operations – to make sure the guests are happy; from airport receiving through their stay here to their departure at the airport. I usually greet the guests and talk to them during their stay. I make sure we have all the right SOPs (standard operating procedures) to create the high standards of this resort and I make sure they are all implemented correctly, from check-in to catering to cleaning. I also oversee the food and beverage operations and the sales and marketing; I check all their materials and provide my ideas. I conduct daily and weekly meetings and briefi ngs with the staff, and with contractors, and oversee the training of staff.

There is no typical day, but if we take yesterday, Monday, for example, I started at 7.30 in the morn-ing. This is one of our very busy days so my key objective was to make sure all the rooms were ready for our incoming guests, make sure reception goes smoothly for them, and that all the facilities they booked are ready for them. I also like to know who the returning guests are. The fi rst thing I did was to check my emails, then I had a breakfast meeting with our chef. I held a meeting with all my departmental managers where we deal with any issues and brief them about the day’s activities. This was followed by the general staff meeting at 10.00. I then spent some time talking to guests around the site, followed by a meeting with the Spa Manager at 11.30; we discussed how we can increase utilisation of this facility. This was followed with a similar meeting with the Diving Centre Manager. I then went off to my room, had a shower and freshened up. I had lunch at 1.30. I usually have it with one of my managers; yesterday it was with the HR Manager. We are in the middle of developing our fi re and safety training programme so I was checking how it was going and also the new SOPs we had recently put in place. These meetings are important, it gives me time to check things and discuss issues. I then went to my offi ce and signed all the cocktail party invita-tions for all our guests and the personal welcome letters for our arriving guests; I also checked the special arrangements for the honeymoon guests. Throughout the afternoon I then met the boats bringing in the arriving guests. At 5.30 I went back to my room and had a shower and watched the BBC and CNN for a while. At 7.30 I went back to the offi ce and checked the emails again. I then went over to the Lighthouse to talk to guests, and checked over one of the other restaurants; it’s important for the staff to see managers around. I then went to reception to talk about today’s (Tuesday’s) departures. I had dinner around 9.30 with my chief engineer and the HR manager, again about the fi re and safety training. This is quite a big project for us at the moment. I then went back to the offi ce, checked the emails and went to bed at 10.30.

No two days are the same, but every one of them is enjoyable.

We hope by now it is becoming clear that service operations managers have an important and responsible role. In essence, service operations managers

● are responsible for managing the design and delivery of services to organisations’ customers,

● are responsible for managing most of organisation’s resources,

● have a signifi cant impact on the success of an organisation.

The success of service operations managers is not simply about performing a good tech-nical task, such as educating a student, delivering a project on time, or providing a holiday.

Good service operations management should lead to better (or more appropriate) services and experiences that are better for the customer, better for the staff and also better for the organisation – the ‘triple bottom line’.

1.5.1 Better for the customer

Customers will be satisfi ed, even delighted if they are provided with the right service, a good experience and the desired outcomes. This delivers value for the customer (for more discus-sion on value see Chapter 3 ).

A problem for service managers is that the customer’s idea of what represents value may well vary from customer to customer and shift through time, and even from day to day. At the most basic level, the economising customers will think of value as getting more for their money. Other customers may be prepared to pay more in order to receive a higher service specifi cation. Still others will value the psychological value in being able to say that they are able to afford to be customers of high-status services (even though the specifi cation may be no better than a lower priced service). The service operations manager must be aware of the full range of infl uences on the customer’s assessment of value. A key element in this understanding is the relationship between the service brand values as communicated to the customer and the potential mismatch in terms of customer experience.

1.5.2 Better for the staff

Good service operations management and the provision of the right services, experiences and outcomes for the customer will also mean a better experience for the staff:

● Customers will be easier to deal with because they are satisfi ed and the service and

experi-ence meet their needs.

● Because the operation works well and generates the right outcomes there will be fewer problems and therefore less hassle for the staff and fewer (unpleasant) complaints to deal with.

● Customers who are satisfi ed tend to be more tolerant, so when things go wrong they are much more accepting than they might otherwise have been, again making life easier for the staff.

● A smooth operation and contented customers means things are going well, thus staff are more likely to have pride in both the job they do and the organisation they work for.

1.5.3 Better for the organisation

Delivering the right service and experience through good operations management delivers many organisational benefi ts:

● Satisfi ed customers who perceive value from the service are more likely to return and also

more likely to provide positive word-of-mouth and recommend the organisation and its