The value proposition
A service is a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks.
Services are a means of delivering value to customers by facilitating outcomes customers want to achieve without the ownership of specific costs and risks. Services facilitate outcomes by enhancing the performance of associated tasks and reducing the effect of constraints. The result is an increase in the probability of desired outcomes.
Over the years, organizations have debated the definition of a ‘service’. The illustration in Figure 2.1 is an example of the realization that service is really about delivering value to customers.
Figure 2.1 A conversation about the definition and meaning of services
Functions and processes across lifecycle
Functions are units of organizations specialized to perform certain types of work and responsible for specific outcomes. They are self-contained, with capabilities and resources necessary for their performance and outcomes. Capabilities include work methods internal to the functions. Functions have their own body of knowledge, which accumulates from experience. They provide structure and stability to organizations.
Functions are means to structure organizations to implement the specialization principle. Functions typically define roles and the associated authority and responsibility for a specific performance and outcomes. Coordination between functions through shared processes is a common pattern in organization design. Functions tend to optimize their work methods locally to focus on assigned outcomes. Poor coordination between functions, combined with an inward focus, leads to functional silos that hinder the alignment and feedback that are critical to the success of the organization as a whole. Process models help avoid this problem with functional hierarchies by improving cross-functional coordination and control. Well-defined processes can improve productivity within and across functions.
Processes are examples of closed-loop systems because they provide change and transformation towards a goal, and utilize feedback for self-reinforcing and self-corrective action (Figure 2.2). It is important to consider the entire process or how one process fits into another.
Figure 2.2 A basic process
Process definitions describe actions, dependencies and sequence. Processes have the following characteristics:
There is often confusion around functions, processes, roles and activities. Functions are often mistaken for processes, and processes mistaken for functions. Service Design, as well as being a stage in the lifecycle of a service, can itself be seen by some organizations as a function, by others as a role or a set of processes or as an activity. Whether or not it is a function, role, activity or set of processes depends entirely on the size, structure and culture of an organization. It is important that however it is defined and implemented within an organization, the success of the function, process, role or activity is measured and continually improved.