Service Management Key Concepts

0:03One of the great things about you and I being

0:05alive in this day and age is all the amazing stuff

0:08that's available to us-- products and services.

0:11Some of it's IT-based, like internet service, or Wi-Fi,

0:14or computers.

0:15We have other products that are available to us,

0:17and services such as restaurants, or grocery stores.

0:20You go in, you buy what you want, you have

0:22what you want to eat.

0:22It's wonderful.

0:23You buy a car--

0:24there's lots of things that we can buy and have.

0:26And those are all in the form of products or services

0:29that are available to us.

0:30And usually, we exchange what for that?

0:32Probably some type of money, or financial compensation

0:36for what they're delivering.

0:37But you know what?

0:38All of those products and services

0:40have something in common behind the scenes,

0:43and that is all of them that are still in business today,

0:46they are all IT, Information Technology, enabled.

0:50Think about it.

0:51For a restaurant, they're keeping track of inventory,

0:53and food, and sales, and everything else.

0:55They're keeping track of payroll,

0:57and who's scheduled to come in and when.

0:59For manufacturing-- let's say somebody's

1:02going to manufacture scissors.

1:03Well, you think most scissors aren't that high tech.

1:05Well, it's pretty amazing that scissors actually

1:08work like they do.

1:09So a company would have to design a new pair,

1:13if they wanted to do that work.

1:14They'd have to figure out how to manufacture it,

1:16how to market it, how to get it delivered,

1:18how to get the payment from customers.

1:20There's a long line of things that

1:21have to be done, a chain of events, in order

1:24for a manufacturer who has a product or a service

1:27to get it over to the customer.

1:29And IT is behind all of that.

1:32So what happens-- if we have this long stream of activities

1:36that need to happen so we can deliver a service

1:38or product to a customer, what happens if one of those pieces

1:42breaks, a piece in the chain breaks?

1:44Well, if we can't deliver the thing to the customer,

1:49or if the thing is delivered, but it doesn't work,

1:51and the customer doesn't see value in any of that,

1:53it's going to cost us a financial hit.

1:56Because we can no longer sell a product, if it doesn't work,

1:58or if we don't have a product to deliver.

2:00So a lot of companies are using IT, Information Technology,

2:03to manage a lot of their business,

2:06in fact, most of their business.

2:07And as far as making sure that everything's working correctly

2:10and the IT is working, there's also a thing called ITSM--

2:14Information Technology Service Management--

2:17just to make sure all those pieces are in place as well.

2:19And then on top of the IT, there's also other factors,

2:22like environmental factors.

2:24There's cost factors.

2:25There's human resource factors--

2:27a whole world of challenges that could attack, or cause

2:30a problem for a provider of services or goods

2:33to be interrupted.

2:35And that also includes IT service management,

2:37but it could be extended to virtually anything.

2:39So the concepts and the techniques

2:40that you and I are going to enjoy together as we go through

2:43are going to help us in taking a better, or a bigger picture

2:46look, at our service management.

2:48So as we enjoy these videos together,

2:50I'm going to make them very concise, very fun.

2:52I look forward to seeing you in every single one of them.

2:54And before we leave this first one,

2:56I want to share with you the official definition regarding

2:59service management, and here it is.

3:01And so service management is a set

3:04of specialized organizational capabilities, things

3:07that a company or organization can do,

3:10which would also include a group of people,

3:12or if you're your own company, what you can do,

3:14to enable value for customers.

3:17Now, in the past, described that as providing value.

3:20However, it is a two-way street.

3:23If somebody makes a camera, and there's

3:25somebody else who has no use for a camera,

3:27there's really not a lot of value being provided

3:29by the provider of that camera, if the user has no need for it

3:33or doesn't want to use it.

3:34So it has to be a two-way street of enabling value,

3:37by having a consumer also interested, and able,

3:40and capable of taking that output from the provider

3:43and turning it into something useful and of value

3:46to that user.

3:47And then, it continues in the form of services.

3:50Now, those services could be generically applied

3:53to products, and/or services, and/or support, or anything

3:57that's being provided to the customers by the vendor,

4:00or by the provider.

4:01In the next video, we'll take a look

4:03at the concept of value and value co-creation,

4:05which is a critical role to make sure our customers are happy

4:09and that they keep coming back.

4:10So I'll see you in that next video.

4:12Meanwhile, I hope this has been informative for you,

4:14and I'd like to thank you for viewing.

0:00I've had the opportunity to work at many different companies

0:03in my career, and at one of those, maybe more

0:07than a decade ago, the CEO and owner at the time

0:10came in and said, Hey, everybody.

0:12What's your main purpose here at work?

0:14What's your main goal?

0:16And it was interesting.

0:17There's a lot of ideas that came up, and none of them

0:20were what he was looking for.

0:21So in this Nugget, I'd like to talk about what he said,

0:24and also what might be a better option as a good direction

0:26to go for every stakeholder and every member

0:29of a team in any organization.

0:31So in answer to that question a decade or so ago from that CEO,

0:36the answer that he was looking for was drive revenue.

0:40That was the number one overarching important thing

0:43to him at that time.

0:45However, as far as we're concerned in organizations that

0:48are healthy and vibrant, one of the strategies

0:51could be to provide value, or at least provide

0:54products or services that might enable value

0:57for those customers who take that output, that product

1:00or service that you have, and then

1:02use it to better themselves, or better their careers, or better

1:05their businesses.

1:07And that brings us to this concept, right here, of value.

1:11And this is one of those definitions

1:12that we would not only want to know, but also

1:14ponder just for a moment on the meaning of this.

1:18So as we look at value, it is the perceived benefits.

1:21Hence, beauty and value is in the eye of the beholder.

1:25And that's because not everything

1:26is of the same value to everyone else.

1:29And a good example of that is a car.

1:32If you look at the type of a car a person drives, and you

1:35ask them, what do you like about it?

1:37Why do you have that car?

1:38There's probably going to be a lot of different reasons

1:40why they see value.

1:42Some of it, I love this car.

1:43Oh, my gosh.

1:44It's the greatest car ever.

1:45Other people might say, well, I bought it for safety

1:47because it's the safest car-- the model they had.

1:50Or somebody else might say, Well,

1:52the reason I got the car I have is

1:53because of the affordability.

1:55It's the most economical of the cars.

1:56Or maybe another car is better on gas mileage

1:59or has other values or benefits.

2:01But the key here is that, regardless of the product

2:03or service, not everybody is going

2:05to see the same value from it.

2:07It's based on what the user or consumer of that product

2:11is perceiving as a benefit.

2:13Another big aspect of that is that if we have a product

2:16or service that's being delivered

2:17and it's not being used properly,

2:19or if the customer and the user don't

2:21have the correct tools or knowledge

2:23of how to use our product, the value

2:25from our output from our product of service

2:27is going to be diminished in their eyes

2:29because they don't know how to use it or they can't use it.

2:31So the key word here is the perceived.

2:34So the perceived benefits, or perceived usefulness,

2:36or perceived importance of something.

2:38So it could be any product or service.

2:41It's all about the recipient, the user

2:43who's receiving our product or service,

2:45and their opinion of what they think

2:47the value is for that service.

2:49And that is why, as an organization,

2:51we should be very focused on providing value

2:54for our stakeholders.

2:56Who exactly is a stakeholder?

2:58Is it an employee?

2:59Is it a customer?

3:00Is it the investors for the company?

3:02Et cetera.

3:03The answer is yes, all those entities

3:05are stakeholders and more.

3:06And we'll take a closer look at who is a stakeholder

3:09and why does that matter, and we'll

3:11cover that in the next video.

3:12Meanwhile, I hope this has been informative for you,

3:15and I'd like to thank you for viewing.

0:00One of the challenges that might come up,

0:02and does come up as we have companies and organizations

0:05that are providing value, is to consider who the person is

0:09that we're providing value to.

0:10Who is the stakeholder, the person

0:12has a vested interest or an interest in what we're offering

0:15or what we're providing?

0:16It could be an investment company that owns the company

0:19or has a stake in it.

0:21Or it could be the end user who's

0:22using our product for part of their business.

0:24They're a stakeholder.

0:25They want to see us succeed, and they

0:26want make sure they're getting value.

0:28And we want them to make sure that they

0:30think they're getting value for our products or service,

0:32so they'll keep buying it.

0:33We also have employees at the company who want

0:36to have a good job to come to.

0:38They want to have pride in their work.

0:39And so one of the concepts when we're

0:41thinking about providing value is

0:43to consider all the stakeholders and identify

0:46what the value is to that person or that entity

0:49that we're providing.

0:50And that way, we have a better opportunity

0:52and probability of delivering the perceived

0:54value to those stakeholders.

0:56So in this video, I'd like to chat

0:57for just a few moments about some of those stakeholders,

1:00and also some of the other parties

1:01involved, as we focus on delivering value

1:04as an organization.

1:06And speaking of organizations, let's

1:08start with that definition first.

1:10So here's the official definition of an organization,

1:14and that is a person or group of people

1:16that has its own functions with responsibilities, authorities,

1:20and relationships to achieve its objectives.

1:23That is about as generic as I've seen.

1:26So basically, any grouping, including down to one person,

1:30that has authority, and responsibility, and capability,

1:34to achieve its objectives.

1:35And hopefully, a big part of that

1:37is to enable value for the stakeholders.

1:40So if we have a company, like Acme Inc,

1:43and that company is involved in providing

1:45a product or a service, we would refer to Acme Inc.

1:48In that context as a service provider.

1:52Now, the concept of a service provider

1:53doesn't mean it's an external company.

1:56We might have an organization within Acme Inc. that's

1:58actually providing some other services to other organizations

2:02in Acme Inc.

2:02But in the moment that we're providing

2:05or provisioning services, we can we

2:07think of that entity, or that organization, or that group,

2:10as a service provider in that instance.

2:12But you know what happens?

2:13Is that nobody is just creating everything from scratch.

2:17I bet you Acme Inc. is also using the services

2:20from somebody else.

2:22So let's imagine another company, 3rd Party Services,

2:26Inc. And in the moment that Acme Inc is receiving some services

2:31from the service provider, 3rd Party Services Inc.,

2:34in that moment, Acme Inc. would be

2:36acting as a service consumer.

2:39And when consuming services, there

2:41are three roles that we want to be aware of.

2:46And they are a customer, sponsor, and user.

2:49And these are all on the service consumer side of the fence.

2:52So the customer would be the person at the organization,

2:55in this case, Acme Inc., who's consuming the resources.

2:57The customer would be the person who

2:59defines the requirements for a service

3:02and also takes responsibility for the outcomes of service

3:05consumption.

3:06Maybe that's a CIO, chief information officer,

3:09who has identified the need for better password management

3:12and has said, we need to use a password manager

3:15on all of our computers.

3:17All of our employees need to use it.

3:18And the CIO would do the research and investigation

3:21on which one would be appropriate to meet

3:23the needs of security with password management.

3:26Now, it's also likely that the CIO, the customer

3:29in this case, who's identifying the requirement for what's

3:31needed, isn't going to pay for everybody's password managers

3:35out of his or her own pocket.

3:37More likely, there's going to be a form of payment

3:40from the company.

3:41And for that to be authorized and approved financially,

3:45that would be the sponsor's responsibility.

3:47A sponsor would be the person who

3:49authorizes the budget for the service consumption.

3:53So I'll put a dollar sign right here, so we remember that.

3:55So whenever you see sponsor, starting with an S,

3:58just think of dollar sign.

3:59And that'll help keep those three straight.

4:01Oh, yeah-- sponsor makes the approval based on the finances.

4:05So once the customer, the CIO, has identified

4:07what the need is and the details for it,

4:09and it's been approved by the sponsor--

4:11maybe that's the chief financial officer or somebody

4:13else in charge of the budget--

4:15then the product is delivered.

4:17And then, hopefully, there's some user training.

4:19And the users start to use that product, that service.

4:22And just before we close, let's also

4:23just touch on other possible stakeholders.

4:25So we have service providers.

4:27We have service consumers.

4:29We might also have service provider employees,

4:31which are also stakeholders, who are

4:33part of the team that's delivering the goods

4:35or services.

4:36Another big stakeholder is the society or community

4:39where the provider is.

4:41That can be making it different, impact-wise,

4:43on that whole economic region, based

4:45on the success of that business.

4:47So the community is also a stakeholder

4:49in the success of businesses in that community.

4:52Other stakeholders would certainly

4:53include shareholders, people who have a financial interest based

4:56on investments in that organization.

4:58They want to succeed.

5:00And another stakeholder could be any other benefactors.

5:03For example, many companies have charities

5:05that they work with to help develop and donate

5:08money and time to.

5:09And those are also stakeholders.

5:11So as we can see, there are a lot of stakeholders.

5:14There's a lot at risk, if we don't correctly

5:16manage our services end to end.

5:17And this can help us out by taking a step back, and taking

5:20a bigger picture look, and making sure

5:22that we're identifying how we're adding value,

5:25or how we're enabling value for our customers

5:27to identify who our stakeholders are, make sure

5:29that they're happy, and that we're providing value

5:31to them as well.

5:32So thanks, for joining me in this Nugget.

5:34And I'll see you in the very next one, which

5:35we'll take a closer look at products and services that

5:39can help deliver that value to our stakeholders.

5:41We'll see you in the next video.

5:42Meanwhile, I hope this has been informative for you,

5:45and I'd like to thank you for viewing.

0:00When an organization wants to provide value or enable value

0:03for a customer, they need to have at least something

0:05to offer, either a product, or a service.

0:07And in this Nugget, we're going to take

0:09a look at both with the concept of a service offering.

0:13And for our first example, let's talk

0:14about a company that manufactures antivirus

0:18or anti-malware software.

0:20So that company has a lot of resources.

0:22They've got people, and programmers,

0:24and marketing, and accounting, and everything else.

0:26But the product that they're delivering,

0:28that they can provide potentially

0:30to customers who want to buy it, would

0:31be an antivirus or anti-malware software.

0:34That would be their product.

0:35And as far as providing value, it

0:37would only provide value for somebody

0:39who actually got the software, and then used it, and then have

0:42that customer perceive a value by protecting their computer

0:45from viruses and malware.

0:47And then, the tricky part can be this.

0:49When we look at services, the anti-malware, antivirus

0:52software could be the service that we're delivering,

0:55that's providing the value.

0:57So if a customer or consumer was interested in protecting

1:00their computer against getting infected

1:03with viruses and malware, they have a few options.

1:06One is they could write the software on their own,

1:08but that would be very, very expensive.

1:10And so to save costs, so the actual customer doesn't

1:13have to create the entire software package by themselves,

1:16and also reduce risk by having the software available that's

1:20effective in protecting against malware,

1:22the customer can just pay a fee for that software as a service.

1:26And then it will be a lot less expensive

1:28than building it on their own.

1:29And at the same time, they're also

1:31reducing the risk of malware and viruses,

1:33because they're using the services of that software

1:35that they're licensing or they purchased from the provider.

1:38Another important aspect regarding paying for everything

1:41is that, if a company is creating

1:43a service, like antivirus or anti-malware software,

1:46or anything else, they want to be able to sell that and affect

1:49many, many people's lives, because those people,

1:52the customers and the users when they pay for the service, that

1:55keeps the company in business, which

1:57helps the stakeholders, all of them, be happy and satisfied

2:01regarding the financial progress of the company that's

2:03providing the service.

2:04So in that light, to maximize our output, what we could also

2:07have is service offerings, and we could cater them.

2:11Maybe we have an anti-malware, antivirus software lite

2:14version, which is free or nearly free for a limited use.

2:18And then we have a bigger enterprise version,

2:20which we charge more for.

2:22And when we talk about service offerings,

2:24the actual service could be including goods, or services,

2:27or both.

2:28And when our service offering includes goods as part of it,

2:32it's like a transfer of ownership.

2:34A good example would be a car that somebody is buying.

2:37If a person buys the car, the ownership

2:39is transferred from the dealership

2:40or from the seller to the person who is buying that car.

2:44So with goods, like paper for our printers,

2:47or other consumables, those goods are purchased.

2:50And then the ownership changes to the person who bought it.

2:53Another part of a service offering may be access.

2:56In the case of access to resources,

2:58the ownership is not being transferred.

2:59Let's use an example of satellite radio.

3:02If we want to purchase a subscription to a satellite

3:04radio, we get to use the service.

3:07We get access to that network, but it's not

3:09like we own the satellite network.

3:11We may own our radio.

3:12But as far as the subscription, and the service,

3:14and the stream coming in, we are simply

3:16paying for the benefit of using that service

3:18without the ownership of it.

3:20And one other component that might be included in a service

3:22offering is service actions.

3:25So if we go back to the car analogy-- somebody buys

3:27the car, they own it.

3:29If they want to purchase XM radio service,

3:31they can purchase that service and use that service.

3:34And maybe they bought an extended warranty.

3:36We make that part of the service offering.

3:38And if they bought an extended warranty,

3:40that warranty would cover repairs and things

3:42that came up, including user support,

3:45or replacing a piece of the car, or correcting a part of the car

3:49if it fails within that warranty period,

3:51based upon the agreement.

3:53So here in the definition for service offering,

3:55it reminds us that the offering may include goods

3:57where the ownership is transferred to the person who

3:59bought it, or access to resources where the person is

4:02licensing that service, or service actions,

4:06which could include user support or replacing

4:08a piece of equipment or something else under warranty,

4:11or under agreement with the service provider.

4:14In this Nugget, we've taken a look

4:15at service offerings, which could include tangible goods

4:18or services as part of an offering to enable value

4:21for our potential customers.

4:23I hope this has been informative for you,

4:25and I'd like to thank you for viewing.

0:00As you and I work in an organization

0:02where we want to enable value for our customers

0:04so they love our product, or our service,

0:06or our service offering, if we want that to happen,

0:09there's a couple of approaches to getting that done.

0:11One is to create our content and just hope they're happy.

0:15Or the other option, which is the good one for survival,

0:19is to have an interaction and relationship with the customer

0:22and with the consumer to make sure that they are happy,

0:26that they are perceiving a very high value from our product

0:28and from our outputs, so we can maintain that relationship

0:31and continue to grow it.

0:33In this video, I'd like to chat with you

0:34about some relationships between the provider and the consumer,

0:38and also introduce some places where we might not expect

0:41that relationship to show up.

0:43But it's critical that we identify it,

0:44so that we can make sure those relationships are strong too.

0:47And let's start our discussion with this diagram right here.

0:51We'll call this organization B and organization C.

0:58And my question for you is, with these two wonderful circles

1:01representing two different organizations,

1:03which one is the consumer, and which one is the provider?

1:07And that's a good question.

1:08We'd have to know more.

1:09We'd have to know things like, OK, who is providing services?

1:13Who's consuming services?

1:14And then we could probably easily identify it.

1:17And let's talk about car manufacturing.

1:20Let's imagine that organization C is a car manufacturer.

1:25There we go.

1:26It's car mfg.

1:28So organization C is manufacturing cars,

1:30but they get some of their parts from a supplier.

1:34And let's imagine that organization B makes--

1:37let's pick something fun--

1:39let's say they make a bumper.

1:41That's just fun to say.

1:42So they make bumpers specifically

1:44for the cars that organization C makes.

1:47So they're outsourcing the bumpers.

1:48In this case, the provider is organization B,

1:51and the consumer is organization C. Now,

1:54that's pretty straightforward.

1:55But some of the questions that we might want to address

1:58is, how many bumpers should we be

2:01getting on a weekly basis or a monthly basis?

2:04Or how many bumpers do we want to have queued up and prepared

2:09for installation on our cars?

2:10Because it's likely we're not going

2:12to want to get 1,000 bumpers, and then wait weeks, or months,

2:16or however long it takes to go through all those,

2:18and then get another 1,000.

2:19We probably want to have some IT in the background tracking

2:22inventory control, cooperation between the two.

2:24And we probably also want to have

2:26some kind of a relationship manager between them.

2:29So we actually have humans that are communicating periodically,

2:32like once a month, or once every two months, or something,

2:35so that we have a clear understanding

2:37of how things are going.

2:38And the reason that service relationship is so important

2:40is because, in organization C, if they

2:43aren't happy with the bumper situation--

2:46too many bumpers, not enough bumpers,

2:47or the quality of the bumpers, or anything else--

2:50if organization B doesn't know that,

2:52if they don't get the indicators and the information

2:54that their customer is not happy,

2:56their customer could just cut that off and go somewhere else.

2:59So relationship management between service organizations,

3:02between the provider and the consumer, are critical.

3:06And this relationship between org.

3:08B and org.

3:09C is creating value, because org.

3:12B is creating the bumpers.

3:13they're doing it as efficiently as they can, hopefully.

3:15And they're getting them to organization C,

3:17who's using those bumpers as part of the car.

3:19So they are partners in co-creation of value.

3:22Now, at the same time, let's talk about organization B.

3:26Where do they get the materials for the bumper, the steel,

3:29or the rubber, or whatever that bumper is made out of?

3:31Very likely, they are getting it from yet another organization.

3:35We'll call that organization A, over here.

3:38And they may be supplying the raw materials.

3:40So in this relationship between org.

3:42A and org.

3:42B, org.

3:43A is the provider of the-- we'll call this raw materials.

3:47And organization B is the consumer of those materials.

3:51And here's my question.

3:52Do you suppose some type of relationship management

3:55would be important here also, between org.

3:58A and org.

3:59B?

3:59And the answer is, yes.

4:01We absolutely, as a provider, we want

4:04to make sure our customers are happy

4:06and that they have a perceived value based on the outputs

4:09that we are creating and delivering to that customer.

4:13And we could add many, many more here.

4:15Let's call this dealership, who sells to humans.

4:20So a car dealership-- there's going

4:21to be a relationship between the manufacturer and the car

4:24dealership.

4:25And all these are bidirectional, or should be bidirectional as

4:28far as the communication path.

4:30So we can make sure that our consumers, who

4:32are receiving our products and services,

4:34are happy and satisfied.

4:36And if their needs are changing, we want to know about that way

4:39early as possible, so we can adapt

4:42and continue to enable value for our customers.

4:44And so together, as we wrap up, let's

4:46look at these four definitions to make

4:47sure we're clear on them.

4:49Service relationship, that's the cooperation

4:51between a service provider and a service consumer.

4:56Service provision are the activities

4:58that are performed by an organization to-- dah, dah,

5:00dah, dah-- provide a service.

5:02Service consumption are the activities

5:04performed by an organization to consume services.

5:07And the service relationship management

5:09are joint, that means mutual activities performed

5:12by a service provider and a service consumer

5:15to make sure that there's continual value

5:18co-creation based on the agreements

5:20and understandings between the provider and the consumer.

5:24In this video, we've taken a look

5:26at the relationship between a consumer and a provider

5:29and how critical it is.

5:30We can make sure our consumers are happy

5:32and that they're getting what they want.

5:33And we're co-creating value with them every step of the way.

5:36I hope this has been informative for you,

5:38and I'd like to thank you, for viewing.

0:00When customers are choosing a provider

0:03or they're changing from provider A to provider B,

0:06why is that?

0:07It's going to boil down probably to the functionality

0:10that they need and also the value that they see

0:12between two similar products.

0:14In this video, I'd like to chat with you

0:16about three core components that are

0:18integral into the customer's perception of what is the best

0:22value for their dollar.

0:23And I'm going to bring back one of our definitions

0:25that we've talked about in a previous Nugget.

0:27And that is services.

0:28So if you and I are part of the company that's

0:31providing some service--

0:32maybe it's a ride share service.

0:34Maybe it's a home delivery service

0:36for food or for products.

0:38Or maybe it's internet service.

0:40If we're delivering a product or service,

0:42we want our customers to perceive our product or service

0:45as having value.

0:47We want to make sure that customer enjoys their product

0:50or service from us and that they stay with us as a customer.

0:53And if they're our customer, our goal

0:54is to enable value co-creation.

1:00Let's say it's a ride share service.

1:02You and I can provide an organization

1:04that does ride share services.

1:05But if the customer never uses it

1:09or if the customer doesn't have the ability to order a car

1:11or request a ride, we're not really

1:13providing a value for that customer

1:15if they can't use our service.

1:17So it takes two to tango-- the provider

1:19to provide a service and then the customer

1:21to go ahead and access or use that service

1:24to co-create value.

1:26So our product or service could be referred to as our output.

1:30But a better way of thinking about what the value is

1:33perceived by the customer is to focus on the outcome, the end

1:38result of what the customer is hoping to achieve or do

1:42with our product or service.

1:43And that, my friend, is the outcome.

1:45So if it's a ride share service and we

1:47have a customer that wants to get from point A to point B,

1:50their outcome is that they want to go from point A to point B.

1:54And then that can be part of a bigger picture.

1:56Maybe they're going to a conference.

1:57Or they're going to a business meeting.

1:58That's part of their objectives and their business.

2:01And it's important to them.

2:02So in a perfect world, our output, whatever it is,

2:05the product or service-- in this example,

2:06a ride share application or ride share service--

2:09should play in and be a part of the customer's desired outcome,

2:13the actual results that they're looking for.

2:16And continuing to use the ride share example,

2:18there is more than just one company out there.

2:20And in some areas there's multiple ride share

2:22organizations.

2:23And why does a person use one over the other?

2:27And very likely they're going to see value.

2:29If there's multiple ride share services,

2:31the one that they see the most value in

2:33is very likely, if they're both available,

2:35the one they're going to use.

2:36And here are three significant components

2:38that are going to go into the equation

2:40for whether or not the customer sees value in it.

2:43Number one, is our product or service supporting the outcome,

2:47the end result that the customer is hoping for?

2:51If the customer is using a ride share

2:53and they need to get to their meeting

2:54or to their location in a half hour,

2:57and one company takes 45 minutes just to show up,

3:01that wouldn't be supporting the customer's outcome

3:03that they're interested in.

3:04They need to get from A to B. And a huge delay

3:07is not going to support the outcome

3:08that they're looking for.

3:09So we need to make sure that our product or service, our output,

3:12is going to feed in and support the outcome that the customer

3:16is looking for.

3:17The second element here is cost.

3:19The definition is the amount of money

3:21spent on a specific activity or resource.

3:24So as far as reducing the cost for our customer,

3:27if there are two or three ride share

3:29companies that are out there, probably each one of those

3:32is going to be less expensive cost-wise than the customer

3:35going out and renting their own vehicle and having to park

3:38and everything else.

3:39So having a lower cost for the same function

3:42is an enticement for the user to go ahead and see

3:45that as valuable because it's going to cost

3:48less overall for the user.

3:50Another element that's going to factor into

3:52does the customer perceive value from our product or service

3:55is risk.

3:57Ideally, we are going to, by providing our product

3:59or service, reduce some risk for that customer.

4:03If a customer wanted a website, for example,

4:06and they wanted to publish their own website and put it online,

4:09they might have to take on the full liability of risk

4:12regarding consent and informing regarding

4:15cookies and everything else on their website.

4:17Or if they hired that out and had somebody else

4:19just do it for them, the risk could

4:21be reduced because the company that is doing the service

4:23is taking on that risk of doing all those details to make

4:25sure they're compliant.

4:27And the definition of risk here is a possible event

4:29that could cause harm or loss or make

4:31it more difficult for the customer

4:33to achieve their objectives or get the outcomes that they

4:35are looking for.

4:37And with similar services, if there are multiple ride share

4:39companies, the question of value is going to come into play.

4:42If both companies can support the outcomes of getting

4:45a person from point A to point B in a timely manner

4:48and they're both about the same cost, which

4:50is both less than renting a rental car,

4:52it could be a situation where the customer is perceiving

4:55that one company does a better background

4:57check on their drivers than the other.

5:00And as a result, the customer might think, oh,

5:02this company, company ABC, does the background checks better.

5:05I feel safer.

5:06I feel like there's less risk.

5:07Hence, I'm going to see more value in that.

5:09And I'll take that company.

5:11I'll choose that company as a provider for the service

5:13because I have less risk or I feel

5:15like I have less risk overall.

5:17So these play into the original definition for services--

5:20a means of enabling value co-creation, the provider

5:23and the consumer, the customer, both participating to get what

5:26they want out of the situation.

5:28The provider usually wants money.

5:30And the customer usually wants something

5:32that's going to help them achieve their outcomes

5:34that they're looking for.

5:35And at the same time, we can reduce the costs

5:37for our customers.

5:38They see it as a value cost-wise.

5:40And, also, hopefully, we're going to reduce the risks--

5:43not introduce additional risk, but reduce the risks

5:46for our customer so they see value in our product

5:48or service.

5:48And as a result, they continue being our customer.

5:51And we don't lose them to somebody

5:53else who they see as a better value in the future.

5:56In this video, we've identified three things

5:58that go into the equation for value

6:00from the perception of the customer.

6:01Number one, does it support the customer's desired outcomes,

6:04what they want to achieve?

6:06Number two, is there less risk involved?

6:08And three, is it saving them money?

6:10Is there less cost for them?

6:12And those three factors are important to remember

6:14as we're delivering our products and services.

6:16I hope this has been informative for you.

6:18And I'd like to thank you for viewing.

0:00Regarding a product or service, if we

0:02want to stay in business for a long time.

0:04The products and services that we create will market those.

0:07We'll let our customers know what they are

0:09and what they're supposed to do.

0:10And then the second half of that, probably the biggest

0:12part, is to make sure that our product or service does

0:15what we say it's going to do.

0:17And also, be available for use.

0:19We have a couple of terms for those.

0:20I'd like to discuss those with you in this Nugget.

0:23And let's use something that we are all familiar with,

0:26and that is a mobile device, whether it's

0:28a cell phone or a tablet.

0:30Let's think to ourselves if there is a provider who

0:33is manufacturing and making these tablets and smartphones,

0:37what are some of the functions that we

0:39would expect to be able to do on these devices?

0:42Now as we think about that, it's very likely

0:45that we're going to be able to run some applications,

0:47and it's also very, very likely that all of these devices

0:51are going to support some type of Wi-Fi.

0:53So in the world of Wi-Fi, we have the A and the B and the G

0:56and the N, AC and AX and now they're calling the 802.11AX,

1:01they're calling that Wi-Fi 6, and they're calling 802.11AC,

1:06we're calling that Wi-Fi 5, and we're 802.11N,

1:09we're calling that Wi-Fi 4.

1:11So the numbering systems for Wi-Fi

1:13is going to be a lot simpler.

1:14So we'd expect to have these newer devices with the latest

1:17flavors of Wi-Fi.

1:18So let's imagine that that's what's

1:20been promised on all these devices, that we can run apps,

1:23whether from their respective stores,

1:24and they also support Wi-Fi.

1:26Now in the world of Itel, when we

1:28talk about the functionality of what a product or service can

1:30do, so what it does or its purpose,

1:36that's referred to as utility.

1:38And one way that's helped me to remember that,

1:40and I'll share it with you right now,

1:42is that when I think of utility and identifying what a product

1:45or service does or its purpose, I think of a protocol

1:49that I'm familiar with, which is UDP, User Datagram Protocol.

1:53So if you think of U with the utility

1:55and think UDP, that can help remind us,

1:57OK, utility is describing what the product does

2:01or its purpose.

2:02And the formal definition is right here,

2:04the functionality offered by a product or service

2:06to meet a particular need.

2:08So let's imagine that you and I are the customer.

2:10So we've identified that we need this device that

2:13has app support and Wi-Fi support and we go out

2:15and we purchase a thousand of them for our company

2:18and we start distributing them and we

2:20start onboarding those devices, and we

2:22discover that they don't work.

2:25Maybe the apps aren't available or the Wi-Fi

2:28isn't working correctly.

2:29And if that happened, that'd be pretty darn disappointing.

2:33So the aspect of the device that the customer

2:35is using that it actually will work and they can use it

2:38and it performs as expected, that's

2:40referred to as the concept of warranty.

2:44So with warranty, will it work and is it

2:50going to be available?

2:51Meaning the service.

2:52So if it's supposed to run apps, are the apps going to work?

2:55If the Wi-Fi is supposed to work and be functional,

2:57will it be available or will it be

2:58functional on the actual product or service that we're using?

3:02And for each of these, I've heard them described that

3:04as for utility, what it does or the purpose of the product

3:08or service.

3:08I've heard that described as fit for purpose.

3:11So again that P is right there from our UDP.

3:14What the device or product or service does,

3:16what is its purpose?

3:17Is it fit for a given purpose?

3:19And for warranty, it's will it work or can it be used?

3:23And I'll put this in red.

3:24So I've heard warranty referred to as fit for use,

3:29meaning now that we have this product or service, it's

3:32supposed to do this as far as utility,

3:34and when push comes to shove at this very moment, can it do it?

3:38Will it do it?

3:39Will it actually work?

3:40And both of these aspects, the utility,

3:42what the service or product is supposed to deliver

3:45and supposed to be able to do and on the back end,

3:48does it do it?

3:49So as a provider, they would want to identify

3:51what does the customer need?

3:52What do they want?

3:53What is the outcome they're looking for?

3:55Provide a product that has that utility.

3:57And then when the user goes to use it,

3:59we want to make sure the warranty is there

4:01as well as far as does it work?

4:03Can it be used?

4:04And is it supporting?

4:05In measurable terms, is it supporting the outcomes

4:08that the customer intended that to be used for?

4:10And if so, and we've lowered the cost for that customer,

4:13and we've reduced risk for that customer,

4:15and it's helping with their outcomes,

4:17it's likely we're going to keep that customer.

4:19And also with referrals, probably

4:21get more as a result of the overall good service

4:24that we're delivering to the customer

4:26by providing both utility and warranty with our products

4:29and services.

4:31In this Nugget, we've identified that utility,

4:33what the purposes for our goods or services that we're

4:36delivering, as well as the warranty, how well they

4:38actually perform in doing what we said they would do,

4:40are both important to making sure

4:42the customer is happy with our product and that they see

4:44value in our product or service.

4:46I hope this has been informative for you.

4:48And I'd like to thank you for viewing.