Service Operations Management

Course Introduction

• A service is any act or performance that one party can offer to another that is
essentially intangible and does not result in ownership of anything. Its
production may or may not be linked to a physical product.

• Service operations management involves understanding the requirements of

customers, managing processes through which a service is delivered and ensuring
a smooth delivery of services. Thus, managing operations in service industry is
called service operations management. It is used to convert inputs (customer
needs) to desired outputs (customer satisfaction).

• In other words, service operations management can be defined as a process of

planning, executing, monitoring and controlling service operations.
S. No Reference No Particulars

1 Chapter 1 Introduction to Service Operations Management

2 Chapter 2 Service Strategy Formulation and Execution

3 Chapter 3 Service Design

4 Chapter 4 Service Process Design

5 Chapter 5 Service Delivery

6 Chapter 6 Service Quality

7 Chapter 7 Service Productivity Measurement and Management
8 Chapter 8 Service Decoupling
9 Chapter 9 Role of IT in Service Operations
10 Chapter 10 Service Operations Management in Different Sectors
Service Operations Management Session 6

Chapter 8: Service Decoupling

 Chapter Index

S. No Reference No Particulars

1 Learning Objectives

2 Topic 1 Concept of Service Decoupling

3 Topic 2 Front-office and Back-office Interface

4 Let’s Sum Up
• Explain the concept of service decoupling

• Discuss how decoupling affects cost

• Discuss the relationship between decoupling and quality

• Explain how decoupling can help in improving speed of delivery

• Describe strategies of implementing decoupling

• Discuss the front-office and back-office interface

 1. Concept of Service Decoupling

• Service decoupling refers to breaking up activities in the service delivery process

and performing these activities separately and independently. For example, a
restaurant can completely separate the food preparation activity from the serving
activity. These two activities can be executed by different individuals.

• In service organisations, front-office activities are generally decoupled from back-

office activities.

• The ‘front-office’ and ‘back-office categorisation’ depends on the level of customer

contact required in an activity.

• If an activity has ‘very low’ or ‘no’ customer contact, it is considered to be a back-

office activity. On the other hand, if an activity requires high-level customer
contact, it is considered to be a front-office activity.
 2. Concept of Service Decoupling

• When front-office activities are decoupled from back-office activities, different

individuals can perform different activities rather than a common set of staff
performing all activities.

• Therefore, decoupling provides the benefits of specialisation to service

organisations in terms of improved expertise of staff members in their assigned
work.

• Such specialisation help in improving efficiency, reducing variability in service

performance and increasing service conformity (as when the same person
repeatedly carries out a task, the service level shows less fluctuation).
 3. Concept of Service Decoupling

Decoupling and Cost

• Decoupling can provide a cost advantage to service organisations as specialisation
leads to increased efficiency of the organisation.

• In decoupling, different activities are performed by a different set of people. As a

result, there is a minimal movement of workers between different activities.
Reduction of staff movement results in lower cycle time, which, in turn, reduces
costs.

• Decoupling reduces services variability which in turn reduces the chance of a

service getting rejected by customers. Therefore, decoupling results in cost
reduction by eliminating waste.
 4. Concept of Service Decoupling

Decoupling and Cost

• It should be noted that decoupling is not always associated with cost reduction. In
many instances, it can result in increased cost as well.

• Implementation of service decoupling requires organisational restructuring,

redefining work processes and flows and hiring specialised people for executing
each individual activity.

• Such changes require a significant amount of initial investment. In addition,

decoupling can result in increased idle time for workers involved in front-office
activities.

• Moreover, decoupling can result in duty over-lapping i.e. some tasks being
conducted multiple times by different workers.
 5. Concept of Service Decoupling

Decoupling and Quality

• Decoupling leads to improvement in quality by increasing service conformance.
Service conformance refers to the maintenance of the same service level
repeatedly over a period of time.

• When a worker is responsible for a single activity or task, he/she gains expertise
in the task in a short period of time.

• Such expertise reduces variation in the activity and decreased variation increases
service conformity.

• However, conformity is not the only component of service quality. Service quality
also includes dependability and accuracy.
 6. Concept of Service Decoupling

Decoupling and Quality

• Decoupling can reduce the autonomy and dilute the role of front-office staff in
dealing with nonstandard customer requests.

• Because of role dilution, the front-office staff may not be able to create the best
customer experience as creating such experience might require seamless
coordination with the back-office staff. Such coordination is not always present in
real-life organisations.
 7. Concept of Service Decoupling

Decoupling and Delivery Speed

• Decoupling focuses on identifying and categorising services based on front-office
and back-office activities.

• The distinction of activities helps in standardising tasks and building expert task
forces that help in delivering quality services.

• Decoupling can transform the delivery speed of a service provider.

• Decoupling helps in dividing activities based on their nature of specialisation.

When each person is specialised in his/her task, the chances for error also reduce,
which ultimately reduces the service delivery time.
 8. Concept of Service Decoupling

Decoupling and Delivery Speed

• Here, you must understand that there is a difference between task speed and
process speed. Decoupling divides a process into different tasks, performed by
different people. It also includes waiting times and hands-off between tasks.

• However, a customer sees a service delivery process as a whole and not in tasks.

• If there is delay in a task, it may hamper the speed of the entire service delivery
process.

• Increased decoupling waiting times and hand-offs between tasks may negatively
affect the entire service delivery speed.
 9. Concept of Service Decoupling

Decoupling and Delivery Speed

• In order to obtain quick delivery speed, it is important to reduce waiting times
and hand-offs between tasks. This can be done by centralising buffers between
tasks or between front-office and back-office activities.

• Keeping buffers helps in dealing with disruptions, allows smooth work flow and
increases service delivery speed.

• It helps in dealing with bottleneck situations by holding inventory ahead of time

to maximise production.

• Here you must note that if the decoupled service is not creating a bottleneck
situation, it is not serving its purpose of cost optimisation.
 10. Concept of Service Decoupling

Decoupling and Flexibility

• Decoupling results in the standardisation of activities as workers are supposed to
follow standard procedures to carry out specific tasks assigned to them.

• Such standardisation results in the loss of flexibility to workers.

• For example, in a coupled environment, the same staff members are responsible
for the entire process rather than a part of it. So staff members have more
autonomy and discretion in carrying out the entire process.

However, in a decoupled environment, each staff member is assigned with a

specific job and he/she does not have control over other activities in the same
process.
 11. Concept of Service Decoupling

Decoupling and Flexibility

• Reduction in flexibility has negative effects on the level of satisfaction of
customers of a service organisation.

• For example, suppose a customer approaches a front-office worker, say a

receptionist in a hotel, and requests certain customised services for which the
receptionist will have to sidestep his/her standard operating procedures.

• In a coupled environment, the receptionist would have such discretion to tweak

certain rules as he/she is responsible for the entire process. However, in a
decoupled environment, he/she will have to coordinate with back-office for such
discretions. Therefore, it becomes difficult for front-office workers to provide
customised services in a decoupled environment.
 12. Concept of Service Decoupling

Decoupling and Strategy

• From the discussion so far, it can be concluded that service organisations mainly
conduct decoupling for two important reasons – decreasing cost and improving
the focus on service.

• However, decoupling often results in trade-offs, i.e. increasing costs and reducing
service quality.

• Therefore, service organisations need to decide on the level of decoupling (high or

low level) and the level of focus on cost or service quality.
 13. Concept of Service Decoupling

Decoupling and Strategy

• On the basis of the decoupling goals service organisations can follow any of the
four types of decoupling strategies, as shown in the following Figure:
 14. Concept of Service Decoupling

Decoupling and Strategy

• High service:
– Under this strategy, a service organisation provides a highly flexible
and customised service to customers at a premium price. This
strategy combines high focus on service with a low level of
decoupling. Organisations that are looking for high operational
flexibility and responsiveness can go for the decoupling strategy.
– Eg:
• Courier follows the high service strategy.
• Customised Gifts / Confectionaries
 15. Concept of Service Decoupling

Decoupling and Strategy

• Focused professionals:
– In this strategy, the main goal of decoupling is to support and enable
the front office to provide seamless services to customers. This
strategy combines high focus on service with a high level of
decoupling.
– Eg:
• A financial service provider follows this strategy.
• Specialist Doctors
 16. Concept of Service Decoupling

Decoupling and Strategy

• Cheap convenience:
– Under this strategy, a low level of decoupling is followed to reduce
cost and provide the highest level of convenience to customers. This
strategy combines high focus on cost reduction with a low level of
decoupling.
– Eg:
• A law firm / Advisory.
• Fast food outlets
 17. Concept of Service Decoupling

Decoupling and Strategy

• Cost leader:
– In this type of decoupling strategy, the primary focus is to reduce the
cost to such an extent that the service provider can provide services
at the lowest possible cost to customers. This strategy combines high
focus on cost reduction with a high level of decoupling.
– Eg:
• Retail chains follow this strategy.
• Ecommerce businesses
 1. Front-office and Back-office Interface

• Service decoupling separates activities (involved in delivering services) into high-

customer-contact/low-customer-contact jobs.

• In other words, it influences the design of the service delivery system by creating
a distinction between contact and non-contact activities.

• Decoupling of activities determines the grouping of employees based on the

degree of customer contact in the process. This further helps in structuring front-
office and back-office activities.

• The terms front-office and back-office are normally used to describe the
parts/departments of an organisation that deal with the customer/ client and
management of the organisation, respectively.
 2. Front-office and Back-office Interface

• The front office, also called front line, is the part, visible to customers and
remains in a direct contact with them.

• It takes care of activities, which help the organisation to be in direct relationship

with customers. Front office involves marketing, user support or after-sales
service teams.

• On the other hand, back office refers to the part of the organisation that covers
all internal processes within the organisation. These internal processes include
production, logistics, warehousing, accounting, human resource management and
so on.

• The back office usually deals with the information system to which end customers
do not have access.
 3. Front-office and Back-office Interface

Role of Customer Contact in Front-office and Back-office Interface

• A customer contact refers to the physical presence of the customer in the service
delivery system.

• The varying degrees of customer contact requirements make it compulsory for

service organisations to decouple high customer contact activities from non-
contact activities. Usually, the decoupling of front-office and back-office jobs is
based on three service design decision phases, which are:

– Deciding where customer contact should occur in a service delivery process

– Deciding which activities in the process should be decoupled from each other

– Deciding how the employees involved in the process should be grouped

together
 Let’s Sum Up

• Service decoupling refers to breaking up activities in a service delivery process

and performing activities separately and independently.

• When front-office activities are decoupled from back-office activities, different

individuals can perform different activities rather than a common set of staff
performing all activities.

• Decoupling can provide a cost advantage to service organisations as specialisation

leads to increased efficiency of the organisation.

• Four decoupling strategies are high service, focused professionals, cheap

convenience and cost leader.

• The terms front-office and back-office are normally used to describe the
parts/departments of an organisation that deal with the customer/client and
management of the organisation, respectively.
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