While all the models mentioned earlier (A-C) contribute to customer satisfaction through reduced costs and faster deliveries, they add little direct value to the customer in terms of increased convenience, choice, or higher value for money. This is further compounded by the trends of globalization, restructuring of various industries, fragmentation of supply chain ownership, and the nature and structure of new industries evolving in the knowledge economy.
For a moment, let us step back to the physical world of goods and services as it existed a few decades ago. Taking the example of various services offered by governments to Figure 3. MODEL C: Complex vertical model (many-many-many relationships)
their citizens, a citizen had to go from pillar to post filling out various forms and documents for obtaining some service, and, after a few days if not weeks or months and a lot of agony, the citizen would get out of the bureaucratic maze with some positive result.
This is quite akin to Model C with one major exception: the various stages of the process were not so efficiently integrated in case of a typical government organization.
To add to the convenience of their citizens, to introduce transparency into their work processes, and also to deliver faster positive results, many government organizations introduced the single-window system, whereby the end customer—the citizen—had to submit a set of documents only once at a window and collect deliverables in the form of some document, certificate, or money on a predetermined date or, sometimes, even instantaneously. As a result, the end customer could receive faster service with a lot of convenience. At the same time, the efficiency and effectiveness of various processes manned by specialist or expert bureaucrats was not compromised. It was either replaced with technology solutions or carried out in the back office without affecting the
consumer.
Similar scenarios and examples exist today in services like travel and healthcare. The domain of healthcare services is replete with many of the issues and problems discussed earlier. For example, if a patient needs attention and requires the services of any of the healthcare service providers, at the very least, patients have to visit a doctor and a pharmacist. However, and more often than not, a number of visits to multiple service providers is required, especially if lab tests and diagnostic results are required. The prevailing bureaucratic governmental restrictions and the rigid health service practices add to the misery and suffering of patients by delaying their treatment. Typical stages of healthcare service procurement of a patient are shown in Figure 4.
As shown in Figure 4, the patient has to approach numerous service providers to get treated. Typically, the steps required are as follows:
• Patient visits the doctor.
• The doctor may suggest further diagnostic tests (the probability of this increases with the advancement of medical science).
Figure 4. Healthcare services procurement by a patient
• Patient goes to the respective laboratory for getting the diagnostic tests done.
• Patient visits the laboratory again to collect the diagnostic reports.
• Patient visits the doctor again with the diagnostic reports.
• The doctor prescribes medication to the patient.
• Patient visits the pharmacy to buy the medication.
• Patient approaches the insurance company or concerned agency for reimburse-ment of medical expenses. Alternatively, the medical agencies (like the physician) approach the insurance company for reimbursement.
It is clear from this example that it is quite an exercise to move people and documents all over the place, sometimes in circles, to access one important and critical service most people require continuously. This is true for most of the service sector industries.
The ERPs, CRMs, and SCMs of today’s world need to integrate and elevate to provide a single-window solution to the end customer in various areas, especially the service sector. One way of doing this is to offer all the products and services related to a solution through a single enterprise—creating a Web-based single window. The government services department example can be extended here. One also can think of travel service firms offering all related services, like hotel bookings, car bookings, and so forth, or hospitals and healthcare polyclinics providing all the healthcare services in one place.
However, there are some significant limitations to this approach:
• Such an integration of services may not be possible in all domains.
• Integrated offering of all services may result in a loss of focus for an enterprise and thereby inhibit the enterprise from developing expertise in any field. As a result, the end customer may not get the best possible service, may get it at a premium, or both.
• The end customer does not get multiple options—if customers want to avail of the single-window convenience, they will have to hire a car through the same travel agent who books their tickets, although there could be better options elsewhere.
• Such a solution also creates a constraint of physical proximity, especially with respect to services like banking and healthcare. The consumer always has to visit or transact with a particular single-window service provider (e.g., a hospital). Thus, after procuring a product or service from a vendor, if consumers move to some other location, they will have no or limited access to the products and services of that particular vendor. For instance, after getting treated at a hospital or polyclinic, when a patient moves to another place, the patient not only will be unable to avail of the services provided by that hospital but also will not have his or her medical history to get faster and better treatment from a hospital at the new location.