MD850: e-Service Operations

1
MD850 e-Service Operations

• Issues and Methodologies for Managing the
  e-Service Life Cycle

2
Overview

• Background
• Product Process Life Cycles
• Understanding the Characteristics of Your
  e-Services Life Cycle
• Frameworks for Understanding and Managing
  e-Service Operations
• Conclusion

3
Background
4
Background

• Concept of a product exhibiting a life cycle
  has motivated a lot of business research
• Product-Process Matrix for manufacturing (Hayes
  and Wheelwright, 1979)
• Service positioning matrixes

5
Background

• e-Services may have no life-cycle
• Nothing is expected to change
• e-Services may have a planned (or unplanned, yet
  reasonable to expect) life-cycle

6
Background

• Failure to plan for e-Services life cycle
• Organization may not make architectural choices
  that will allow the e-service to evolve
• Organizations have a tendency to utilize all
  internal resources for immediate operational
  needs
• May need to contract for external IT services to
  evolve your e-service to the next stage of its
  life cycle

7
Background

• Intended Insights to Gain from Todays Readings
• Important to understand the nature of your
  e-Services life-cycle
• Choose a formal planning method to plan for the
  life-cycle
• Create a formal operational support plan that
  takes into consideration current activities and
  future business requirements

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Product Process Life Cycles
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Product Process Life Cycles

• If we believe that there is some life cycle for
  our e-service, then one can construct frameworks
  for positioning
• Service product
• Service process
• Service supply chain

10
Product Process Life Cycles

• Frameworks for positioning help managers to
• Map out the lay of the land in their industry
• Understand their present position
• Understand their competitors positions, and use
  that as a frame of reference for their own
  services
• Plot a path characteristic of the e-service
  life-cycle

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Product Process Life Cycles Positioning
e-Service Product Categories
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Product Process Life CyclesPositioning
e-Service Product Categories
Dynamic Mass Market
Customized Mega Market
Niche Market
Market Extender
Unique Need
Broad Need
Broad Need
Unique Need
Static Content
Dynamic Content
Business Models
Retail
Advertising
Infomediary
Community
Manufacturer
Subscription
Brokerage
Utility
(Business Models from http//ecommerce.ncsu.edu/bu
siness_models.html)
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Product Process Life CyclesPositioning
e-Service Product Categories
Dynamic Mass Market
Customized Mega Market
Niche Market
Market Extender
Unique Need
Broad Need
Broad Need
Unique Need
Static Content
Dynamic Content

• What implications does this have for appropriate
  choice of service-product attributes for each
  category?
• Where would certain companies be positioned
  withinthis model?

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Product Process Life CyclesPositioning
e-Service Product Categories
Dynamic Mass Market
Customized Mega Market
Niche Market
Market Extender
Unique Need
Broad Need
Broad Need
Unique Need
Static Content
Dynamic Content
RaisinRack.com
Travelocity.com
GEMM.com
BaltCoffee.com
AutoWeb.com
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Product Process Life CyclesPositioning
e-Service Process Categories

• Service Kiosk
• HTML static files
• Make-to-Stock service-process strategy
• Service Mart
• CGI scripts executables
• Assemble-to-Order service-process strategy
• Mass Service Customization
• Databases
• Make-to-Order service-process strategy
• Joint Alliance Service Customization
• Federated databases, distributed knowledge mgmt.,
  
• Make-to-Order service-process strategy
• Cross-organization processes
• Processes within processes

Low volume Low/High offline flexibility Low
online flexibility
Medium offline flexibility Medium online
flexibility
High volume Low/High offline flexibility High
online flexibility
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e-Service Product-Process Matrix
Dynamic Mass Market
Customized Mega Market
Niche Market
Market Extender
Service Kiosk
Service Mart
Proposition Best Strategy is to Pick
Position Within Oval
Mass Service Customization
Joint Alliance Service Customization
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Product Process Life Cycles Aligning e-Service
Product and Process
Raisin Rack
Austrian Country Market
Alaska Choice Seafood
Cellar Homebrew
AA Italian Specialty
peapodgift.com
Crusoe Island
Chocoholic.com
shopping.msn.com
aol.com
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Understanding the Nature of Your e-Services Life
Cycle
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E-Service Life CycleTrivial Life Cycle
Time
Niche Market

• Management Issues
• Minor site upgrades of static content
• Change Management with each upgrade
• Risk of becoming obsolete
• Risky to become popular

Market Entry
20
E-Service Life CycleMulti-Stage Life Cycle
Time
Market Extender
Dynamic Mass Market
Customized Mega Market
Market Entry
Planned Phase 2
Market Dominance
21
E-Service Life CycleCombining Product Process
Life Cycles
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E-Service Life CyclePortal Management Model

• Portal Management Model (PMM) describes evolution
  of
• Managerial focus of an e-service (a portal)
• Customer behavior in response to evolution of
  e-services characteristics
• Strategic behavior of the company developing the
  e-service

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E-Service Life CyclePortal Management Model
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E-Service Life CyclePortal Management Model
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E-Service Life CyclePortal Management Model

• Incidents of Existential Crisis
• Attraction Phase Customers/Users do not return
  to your service
• Contagion Phase Your service is not able to
  retain a critical mass of customers/users
• Entrenchment Phase Your service is not being
  creative and original, and is unable to develop
  and offer proprietary service attributes
• Defense Phase A disruptive technology comes
  along, and you dont notice it in time, before
  some other portal has implemented it and
  attracted your customers away with their better
  service attributes

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E-Service Life CyclePortal Management Model
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Choose/Develop and Use a Framework for e-Service
Operations Management
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e-Service OM Frameworks

• Why?
• Need an operational IT support plan that fits a
  companys exact needs throughout the e-Services
  life cycle
• Current IT demands
• Future business requirements
• Need flexibility and scalability to acquire and
  integrate resources as needed
• Need to keep control over operational assets
• Need to manage IT components/services delivered
  by external service providers

29
e-Service OM Frameworks

• Two Examples
• IBM Total Systems Management
• Microsoft Microsoft Operations Framework

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e-Service OM FrameworksIBMs Total Systems
Management
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e-Service OM FrameworksIBMs Total Systems
Management
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e-Service OM FrameworksMicrosoft Operations
Framework
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e-Service OM FrameworksMicrosoft Operations
Framework
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e-Service OM FrameworksMicrosoft Operations
Framework

• Basic Steps to Create Operate a New e-Service
• Define a new business requirement
• Microsoft Planning Services
• Microsoft Readiness Framework
• Build and deploy a solution
• Microsoft Solutions Framework
• Operate the solution
• Microsoft Operations Framework
• Iterate through improvement cycles
• Start over at the top again

35
e-Service OM FrameworksMOF Process Model

• Functional model of the processes that operations
  teams perform to manage and maintain e-services
• Focuses on managing change throughout the
  lifecycle of a service

Drive changes to optimize service delivery
Introduce new service solutions
Execute day-to-day tasks
Resolve incidents quickly
36
e-Service OM FrameworksMOF Process Model

• Underlying Principles behind the MOF Process
  Model
• Provides a structured architecture of all
  operational activities
• Rapid life cycles and iterative development
• Review-driven management reviews at key points
  so upper management can be involved
• Embedded risk management ongoing risk
  evaluation and contingency planning

37
e-Service OM FrameworksService Management
Functions (SMFs)
Different Service Management Functions take
responsibility for different portions of the MOF
Process Model
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e-Service OM FrameworksMOF Team Model
Team Role clusters all support the same quality
goals
39
e-Service OM FrameworksMicrosoft Operations
Framework
Team Role clusters will support different
portions of the MOF Process Model
40
e-Service OM FrameworksMOF Risk Model
Need to put in place a process for identifying,
understanding, and managing operational risks
throughout the e-Service lifecycle
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e-Service OM FrameworksMOF Risk Model

• Risk Assessment Process
• Risk assessment document
• Gather information about risks
• Top risks list
• Identify costs of risks and prioritize risks
• Retired risks list
• When a risk becomes irrelevant, retire it to a
  historical reference list of risks

42
Operational RisksThe Universe of Risk (Ernst
Young)
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Operational Risk in e-ServicesExample Financial
Services Industry
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Summary

• Important to identify the likely stages of your
  e-Services Life Cycle
• Choose a planning method for managing your
  e-Service throughout the stages of the lifecycle
• Things to identify and manage
• Process need a process model
• Teams need a teams model
• Risks need a risk management model