Operations Management for Service Industries: Competing in the Service Era

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ERP provides rich functionality for all key service delivery processes such as service delivery, staffing, client billing, contact management, service notification, revenue recognition and profitability analysis. ERP is a comprehensive service business software solution that enables you to resource your business and manage service delivery. The ERP tool also helps you streamline financial operations and analyze business performance across the entire service organization. Embracing the latest in technology, ERP provides a real-time, accurate view of your services, so you can proactively manage it with confidence.

Embedded business process management provides the flexibility you need as your business evolves. The right ERP approach can create the transparency your service company requires. ERP for service industries can help you control projects, tasks and engagements more effectively. ERP for service industries offer ready-to-go capabilities for a wide range of service organizations, including consultancies, accountants, law firms, architecture practices, engineering and construction businesses, real estate companies, etc.

Service companies vary hugely in terms of what they deliver to their customers and the scale on which they operate. In terms of information technology IT , the front office systems are usually specialized to support the specific service operations. As a result, the front office systems are often provided by niche suppliers.

ERP for Service Industries

Therefore, the challenge for service companies is to find the best balance between front office and back office systems. New entrepreneurial style service organizations, which are planning to grow rapidly, should give careful consideration to the front or back office split in an ERP software. Using an ERP based approach for the back office will deliver a cost effective and scalable solution. The ERP system also enhances the rich functionality provided by the specialized front office system.

In order to deliver the best service possible to their clients, people-centric organizations have very specific and varied requirements when selecting an ERP solution. Maximizing resource utilization, project management and execution, and managing time and expenses, are some of the ERP capabilities. Rather than receiving a single payment for a piece of manufactured equipment, many manufacturers are now receiving a steady stream of revenue for ongoing contracts.

Full cost accounting and most accounting reform and monetary reform measures are usually thought to be impossible to achieve without a good model of the service economy. Since the s, the global economy has undergone a structural transformation. For this change, the American economist Victor R.

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He believes that the United States has taken the lead in entering the service economy and society in the Western countries. The declaration heralded the arrival of a service economy that began in the United States on a global scale. With the rapid development of information revolution and technology, the service economy has also shown new development trends. This is seen, especially in green economics and more specific theories within it such as Natural Capitalism , as having these benefits:. Product stewardship or product take-back are words for a specific requirement or measure in which the service of waste disposal is included in the distribution chain of an industrial product and is paid for at time of purchase.

That is, paying for the safe and proper disposal when you pay for the product, and relying on those who sold it to you to dispose of it. Those who advocate it are concerned with the later phases of product lifecycle and the comprehensive outcome of the whole production process. It is considered a pre-requisite to a strict service economy interpretation of fictional, national, legal "commodity" and "product" relationships.

It is often applied to paint, tires, and other goods that become toxic waste if not disposed of properly.

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It is most familiar as the container deposit charged for a deposit bottle. One pays a fee to buy the bottle, separately from the fee to buy what it contains. If one returns the bottle, the fee is returned, and the supplier must return the bottle for re-use or recycling. If not, one has paid the fee, and presumably this can pay for landfill or litter control measures that dispose of diapers or a broken bottle. Also, since the same fee can be collected by anyone finding and returning the bottle, it is common for people to collect these and return them as a means of gaining a small income.

This is quite common for instance among homeless people in U. In some countries, such as Germany , law requires attention to the comprehensive outcome of the whole extraction, production, distribution, use and waste of a product, and holds those profiting from these legally responsible for any outcome along the way. This is also the trend in the UK and EU generally.

In the United States , there have been many class action suits that are effectively product stewardship liability - holding companies responsible for things the product does which it was never advertised to do. Rather than let liability for these problems be taken up by the public sector or be haphazardly assigned one issue at a time to companies via lawsuits, many accounting reform efforts focus on achieving full cost accounting. This is the financial reflection of the comprehensive outcome - noting the gains and losses to all parties involved, not just those investing or purchasing.

Such moves have made moral purchasing more attractive, as it avoids liability and future lawsuits. The United States Environmental Protection Agency advocates product stewardship to "reduce the life-cycle environmental effects of products. As a result, employment is also adjusting to the changes and people are leaving the agricultural sector to find work in the service economy.

This job creation is particularly useful as often it provides employment for low skilled labour in the tourism and retail sectors, thus benefiting the poor in particular and representing an overall net increase in employment. The export potential of many of these products is already well understood, e.

The trend of servitization is very visible while looking at the growth of the service shares in the United States and European countries GDP than 20 years ago. Services are becoming an inseparable component of the product, as the supplier offers them jointly with the core to improve its performance IBM, However, what are the key drivers for reshaping the business model of the company?

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The financial driver is reflected in improved profit margins and stable income, that come with servitization. In the increasing price competition among product offering, companies can use services to recover the lost potential revenue. Strategic drivers mainly focus on gaining and securing the competitive advantage by the company. In order for the company to be able to achieve sustainable competitive advantage, its resources should be valuable, rare, difficult to imitate and organised. Servitization might not be the ultimate and only guarantee for the company of achieving it. However, it shows to be valuable as it is not provided by many suppliers and it facilitates the usage of the product by the customer.

It is also rare and difficult to imitate as not too many companies have capabilities of providing service to the customer, as the producer has the superior knowledge and experience in the product functioning. Moreover, services are less visible and require more labour, therefore, prove to be more difficult to imitate.

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