Service enterprise productivity in action: measuring service productivity

Abstract

Purpose The purpose of this paper is to measure service productivity using the Service Enterprise Productivity in Action (SEPIA) model. The research operationalises only one of the five stakeholder groups, the customer interface which incorporates service complexity (SC), customer interactions, customer channel, customer loyalty (CL) (new) as inputs, and CL (referred and repeat) and willingness to pay as output measures. Design/methodology/approach The research extends our understanding of existing service productivity models with the development of the SEPIA model. Data were collected from 14 organisations operating in the Australian travel and tourism industry, which was analysed using a data envelopment analysis input oriented variable return to scale method as applied to the SEPIA model customer interface. Findings Four key findings from the research include: customer choice and their ability to pay is a determinant of service productivity; service productivity is a two stage process when measured; SC is not categorical; and quality business systems do impact service productivity. Research limitations/implications A limitation of this research is that only one (customer) of the five key stakeholders, customer, employee, manager, supplier and shareholder, was operationalised in this research paper. Practical implications The operationalisation of the SEPIA customer interface using transactional data and measuring non-financial, intangible factors of productivity provide managers with insights on what services to offer, when to invest in or promote the use of technology and whether to spend marketing effort on customer acquisition or customer retention. Originality/value The SEPIA model positions service firms within a social and service value network and provides a range of customer measures that extend the current capital (K), labour (L), energy (E), materials (M) and service (S), KLEMS measure of productivity and can be used to show the impact customers have on service productivity.