1.1 INTRODUCTION
Services represent by far the largest contributor to the U.S. economy. Based on data published by U.S. Bureau of Labor Statistics, services and the total employment in the service sectors make up over 75 percent of the U.S. gross domestic product (GDP). As well, up until the year 2018, 96 percent of all 15.3 million new jobs are expected to come from the service sectors. Accordingly, the importance of services to the U.S. economy is clearly self-evident (Bartsch 2009). In fact, systems engineers are ranked at the very top of the list of āBest Jobs in America,ā with a 45% growth over a ten-year period, according to a Moneyline article (Anonymous 2009).
This chapter provides the definition and characteristics of services in contrast to products. Following this explanation, service sectors in the United States are introduced. A systems view of service enterprises is presented and the principles of service systems engineering are delineated. The skills and capabilities deemed essential to service systems engineers and leaders are then discussed, including how this text will help future graduates acquire the T-personality to meet the challenges of the new millennium. Conclusions are then presented.
1.2 SERVICES VERSUS PRODUCTS
Services are defined as ācombinations of deeds, processes, and/or performances provided to customers in exchange relationships among organizations and individualsā (Zeithami et al. 2006). Services have seven key characteristics:
- Provider and recipients are in direct face-to-face contactābased on the service roles, self-selected by the providers to prefer for such direct contact.
- In service sectors, the merits of quality and productivity are not well defined (e.g., no physical parameters as existed in the goods sector)āraising issues related to whether cognitive science, organization, and engineering systems are more prominent in service delivery, productivity, and quality.
- Although the physical assets depreciate over time and use in goods sector, key assets are generally reusable in the service sector. These service assets may actually increase in value. Examples are organization and human resources that derive from knowledge bases and skills realized in service interactions.
- In the goods sector, equipment is usually newly designed and hence protected by intellectual rights. In services, equipment in application is often purchased and nonprotectable.
- Services focus on knowledge-based understanding of technology and on how to use technology.
- For service organizations, the keys to success are to adapt, utilize, and incorporate technological processes and equipment.
- The right strategy of management of technology for services needs to take these factors into account.
Services are activities that cause a transformation of the state of an entity (e.g., a person, product, business, and region/nation) in a manner that is mutually shaped by its provider and the client. The transformation of the state of a person can be accomplished by services related to foods, healthcare, leisure, hospitality, travel, financial/investment advisement, banking, legal, education, entertainment, mail/package delivery, and others. The transformation of the state of a product is made possible by the design, operations, and maintenance services rendered. The transformation of the state of a business is the result of pursuing management consulting, outsourcing, e-procurement, marketing research, mergers and acquisitions, and others such corporate activities. The transformation of the state of a region/nation requires consulting advice and analysis related to regional/national economic advancement strategy, taxation policy, and other such macroscopic issues.
Services activities are becoming increasingly more diversified. Individual services are relatively simple, although they may require customization and a significant back-office support (e.g., database, knowledge management, analysis, forecasting, etc.) to assure quality and a timely delivery. Product services are also relatively straightforward, as product specifications, performance standards, quality control, installation guidelines, and maintenance procedures require good communication and understanding between providers and users. Business services are complex; some may involve intensive negotiation, work process alignment, quality assurance, team collaboration, and service coproduction. Regional and national services are even more complex, as they may affect policy, custom regulations, export permits, local business practices, logistics, distribution, and other such issues.
Services play an important role in an economy, as illustrated in Fig. 1.1 (Guile and Quinn 1988).
Services may also be classified into either front-stage or back-stage activities, depending on how close/remote the activities involved are to/from the customers. Front-stage activities are those in which provider and client interact d...
