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Questions and Answers
What is the main reason why services are becoming increasingly important in business?
What is an example of a service that influences the customer's perception of the quality of the service provided by the railway company?
What percentage of CEOs stated that they were worried about how professional services were contracted in their respective companies?
What is a characteristic of services according to the definition?
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What is an example of a service that may be provided in combination with a tangible good?
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Why is purchasing services becoming more professional?
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Why is professionalizing service buying challenging?
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What is a unique challenge when specifying services?
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Why are internal experts valuable in service buying?
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What makes it difficult to decide on objective selection criteria for services?
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What is a key benefit of teaming up with internal customers for service buyers?
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What is a business critical service?
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What is the purpose of specifying the scope of work for service providers?
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What type of specification focuses on what goes into the service?
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What is the purpose of checking supplier references and experiences of other customers?
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What is the importance of the post-contractual stage in services?
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What is the purpose of agreements on access to company information?
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What is the importance of key performance indicators (KPIs) in services?
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What happens during the pre-contractual stage of the purchasing process for services?
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What is the purpose of periodic assessment and evaluation by the buyer?
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What is the importance of differentiating between the person who supervises the quality of services and the person who monitors the follow-up?
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Study Notes
The Increasing Importance of Services
- Services are becoming increasingly important, with more and more activities being purchased.
- The share of purchased services in the value proposition is increasing.
- Example: railway companies outsourcing cleaning services to external providers, which affects the traveler's perception of the service quality.
Services vs. Goods
- Services are intangible, consisting of a series of activities that take place in the interaction between customer and supplier employees, and/or physical resources and systems.
- Services can be offered in combination with tangible goods.
- Examples: investment goods with maintenance services, equipment with technical support.
Classification of Services
- Facility services: cleaning, contract catering, security, building maintenance.
- Financial services: banking, leasing, salary administration, insurance.
- Professional services: legal, management consultancy, risk management, information and communication tech services.
- Transportation and distribution services: warehousing, value-added logistics, transport services.
- Human resource services: training, recruitment, hiring temporary personnel, marketing services.
Classifying Services: Business Critical vs. Non-Business Critical
- Business critical services are part of the company's value proposition to its customers.
- Examples: technical support, maintenance services.
Purchasing Process for Services
- Pre-contractual stage: specifying, selecting, contracting services.
- Specifying: defining the scope of work for service providers, which can be done in three ways:
- Input specification: focusing on resources and capacities used by the service provider.
- Process (throughput) specification: agreeing on activities performed by the service provider.
- Output/result specification: buyer explicitly states the expected results.
Selecting Service Providers
- Buyers need to check supplier references, experiences, and reputation.
- Screening involves checking certificates, diplomas, and positive references provided by other customers.
Contracting Services
- Agreements on access to company information may be necessary.
- Key performance indicators (KPIs) need to be agreed upon.
- Periodic assessment and evaluation by the buyer are essential.
Post-Contractual Stage
- The interaction between the buying organization and the supplier determines the success of the contract.
- It is important to differentiate between the person who supervises the quality of services and the person who monitors the follow-up.
Involvement of Purchasing in Contracting Services
- The buyer of the service needs to team up with the internal customer.
- The company's expert plays an important role in valuing relationships with service providers.
- Buyers value objectivity.
Conclusion
- The number of services involved is increasing and becoming more important for companies.
- Professionalizing service buying is challenging due to the spread of service expenditures throughout the company.
- Buying services requires specific expertise and close collaboration with internal experts.
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Description
This quiz covers the increasing importance of services in business, differences between goods and services, classification of services, and the role of purchasing in contracting services. Learn about the growing trend of outsourcing activities and the share of purchased services in the value proposition.
