one
Chapter One
Meaning and Characteristics of Services Vs Products
A service is an intangible item, which arises from the output of one or more individuals while a
product is a tangible item that is put on the market for acquisition, attention, or consumption.
A product is tangible (visible). It has physical existence. By acquiring a product a person may
acquire an asset, e.g., a television.
Product
Service
1. It is tangible.
It is intangible
2. Quality standards can be attained.
It is very difficult to attain quality standards.
3. It may be an asset sometimes,. e.g., fridge, television It involves expenditure without any tangible return
set, etc.
benefit.
4. Physical possession is possible.
Physical possession is not possible.
5. It can be stored.
It cannot be stored.
6. It can be transported.
It cannot be transported.
The producer of service is the seller too, e.g., medical
7. The producer and the seller may be different persons. and legal services.
8. Assembling is very important.
Assembling has no relevance at all.
Skill of the service provider is the deciding factor in
9. Skill of the seller alone cannot determine sale.
most cases, e.g., legal, catering and medical services.
10. Production and distribution need not take place Production and distribution of service will have to be
simultaneously.
done simultaneously, e.g., provision of electricity.
11. Packing plays a crucial role in the marketing of any
product.
It has no relevance in the marketing of service.
one
Rationale of Studying Services

Services dominate economy in most nations

Understanding services offers you personal competitive advantages

Importance of service sector in economy is growing rapidly:
Services account for more than 60 percent of GDP worldwide
Almost all economies have a substantial service sector
Most new employment is provided by services
Strongest growth area for marketing
Meaning of Public Service
Public service is a service which is provided by government to people living within its
jurisdiction, either directly (through the public sector) or by financing provision of services. The
term is associated with a social consensus (usually expressed through democratic elections) that
certain services should be available to all, regardless of income. Even where, public services are
neither publicly provided nor publicly financed, for social and political reasons they are usually
subject to regulation going beyond that applying to most economic sectors.
Historically, the widespread provision of public services in developed countries usually began in
the late nineteenths century, often with the municipal development of gas and water services.
Later on, other services such as electricity and health care began to be provided by governments.
In most developed countries such services are still provided by local or national government, the
biggest exceptions being the U.S. and the UK, where private provision is more significant.
Nonetheless, such privately provided public services are often strongly regulated, for example (in
the US) by Public Utility Commissions. In developing countries public services tend to be much
less well developed. For example, water services might only be available to the wealthy middle
class. For political reasons the service is often subsidized, which reduces the finance available
for expansion to poorer communities. Now days, in most of the countries in the world the term
public services often include the following services:
-Electricity
-Education
-Public transportation
-Environmental protection
-Postal services
-Public broadcasting
-Public library
-Telecommunication
- Water services
-Health care
-Law enforcement
-Military
-Waste management
one
Public services range from basic services to essential services. Basic services are intended to
improve the quality of life, whereas, essential services are those that are optional. Basic services
are services, whose delivery is sanctioned by law while optional services are left to the discretion
of local governments. Basic services include mandatory services like police protection, while
optional services are determined by the nature of services and the need and the standard of living
of a given individual or locality or country. Therefore, the type of service provided in a certain
locality may vary from basic services to optional or recreational services, the latter depending on
factors that include governmental fiscal capacities and community dispositions.
Public services also could be divided into services that may be spatially divisible targeted certain
local beneficiaries or spatially indivisible that provide benefits over a wide area like
transportation. Some services are also classified into point pattern facility systems and network
facility systems or area-based services or a combination of both systems. Local school or health
center could be an example of point-based service while water supply is an example of network
service.
In general, public services are also categorized as physical infrastructures, and social
infrastructures. In developing countries physical and social infrastructures like education, health,
water supply, roads etc. are mostly provided by government agencies. The government also plays
the role of creating suitable environment for the private sector. Therefore, by and large, services
are related with sectoral development issues, which are provided by different agencies and
defined as access to basic developmental goods or services available to citizens and contributes
to human needs or development. In varying degrees, basic public sector services like water
supply and sanitation, housing or shelter, primary healthcare, education and roads are largely
provided by government.
Service Delivery Approaches
1. Public-Private Partnerships (PPPs)
Government enters into a formal agreement to provide services in partnership with other parties
where each contributes resources and shares the risks and rewards. It means a true sharing of
powers and authorities that can lead to significant change and renewal for public sector while
stimulating the private sector. Partnerships may result in better use of limited resources, and take
full advantage of entrepreneurial opportunity.
one
The government and the partners share the risks and rewards. Mutual benefits accrue to each side
of the partnership to further the objectives of the service program. All parties contribute
resources and work towards a common goals. PPP requires a careful management and control.
Roles must be clearly defined, risks understood and fairly allocated and activities monitored. All
parties have accountabilities for their share of the service. The government safeguards the public
interest through terms and conditions of franchise or license. It receives value through fees,
royalties and other franchise payments.
PPP can take a remarkable variety of innovative forms and can involve a wide range of
participants, including public organizations at different levels of government, business firms,
charitable organizations, voluntary organizations and labor unions. Partnerships between
governments and nongovernmental actors can help achieve such objectives as improved service
delivery, reduced costs and economic productivity.
2. Privatization
The government sells its assets or its controlling interest in service to private sector, but may
protect public interest through legislation and regulation. In privatization, government has made
conscious decision to get out of the business entirely and leave the market forces to make
decision as to what type of services should be provided.
The government ensures the integrity of the process by establishing strict criteria for the
selection of assets, rigid guide lines for protecting the public interest, enforcement of conflict of
interest policy and ensuring the processes are open to scrutiny by legislation and the public. The
private sector has autonomy over service delivery.
Forms of Privatization
Most literatures on privatization have described some of these forms or methods of privatization
as follows:
i.
Asset sales/divestiture
Divestiture involves the partial or complete transfer of public assets to private hands. The
strongest argument for this option is that this will raise revenue for the government, which can be
used to reduce the budget deficit and/or public debt.
ii.
Management Contracts
Under a management contract, a private firm manages the operations of a state owned enterprise
without committing its own investment capital or accepting full commercial risk or tariff
one
collection or other -matters. Two conditions are required for a successful management contract:
The contractor must be given enough autonomy to implement commercial reforms. The contract
must contain effective incentives for good performance, including penalties for failure to meet
agreed performance, and bonuses for superior performance. Management contracts are
sometimes seen as an alternative option when government commitment to fuller private
participation is weak or where it is expected to improve information about the enterprise and its
market before more ambitious private participation options are considered.
iii.
Concessions
Concession is a process in which assets are leased out to a Concessionaire at a fee. It basically
entails the Government earning money by renting out the assets and facilities to the
concessionaire. It is envisaged that the Concessionaire will do all maintenance/replacement of
assets. The private operator manages the company facilities, operates at its own commercial risk
and accepts investment obligations whether to build a new facility or to expand or rehabilitate an
existing facility. A typical contract has a fixed term and it involves transfer of the assets back to
the state at the end of the contract. Concessions are a common option for water, ports, airports
and toll roads, where governments desire private investment but do not wish to relinquish rights
to ownership of assets in the long term. There are various types of concessions. These include:

Build-Operate-Transfer (BOT), a concession contract under which a private operator
agrees to build, operate and maintain a facility or system for a specified period of time after
which the facility is transferred to the contracting authority.

Build-Own-Operate-Transfer (BOOT) - is another form of concession where the
private individual agrees to build, own and operate the facility for a given period of time. At the
end of the contract, the facility reverts to the authority at no cost.
iv.
Contracting-out
Under this privatization model, Government retains control of the activity but contracts out to the
private sector the production of goods or services. Instead of using government employees and
equipment, private firms are paid from government funds to perform specific tasks or to supply
specific goods/services. Government sets the standards and determines specifications with regard
to the timing and quantity of services to be provided. In order to benefit from contracting-out, the
outsourcing out of services to the private sector should be carried out through competitive
bidding.
one
v.
Franchises
Franchising involves the government granting a private firm an exclusive franchise to supply a
particular service in a given locality. The government may maintain control over the price of the
goods or services to be sold by the private sector. The advantages of franchising are: government
continues to regulate the provision of public utilities such as electric power provision, telephone
services and water distribution, competition is introduced through competitive tenders or bids for
the franchises, the private individual/company is granted a service for a defined time period and
the franchise may be revised and negotiated at regular intervals.
3. Single-window
This approach brings together government services so that citizens can access them more rapidly
and efficiently. The purpose is to provide seamless service across government departments or
even across governments. Moreover, the services can be delivered through one or more of the
main delivery channels — the telephone, the Internet or walk- in centers.
4. Decentralization
In the last couple of decades decentralization has became a global phenomenon practiced by
majority of world states irrespective of their geographical location and population size. In
developing countries decentralization is taking place at high speed with different forms of
arrangements. Decentralization is part of global influence on improving governance and national
political system where people and citizens are given ultimate power over their political life.
According to many authors, decentralization refers to “transfer of authority on a geographical
basis whether by de-concentration, (i, e., delegation) of administrative authority to field units of
the same department or level of government or by the political devolution of authority to local
government units or special statutory bodies”. It has two categories: decentralization from the
centre to lower tiers of government or to Nongovernment organizations and market
decentralization, where the government divests and withdraws from providing economic goods
and services to the private sector.
Measuring Performance; Satisfaction or Outcomes
Outcome measurement is the regular measurement and reporting of the outcomes (results) of
public agency programs. Measurement should be done at least annually but preferably more
frequently, such as quarterly. The agencies might be national government agencies or sub
national agencies. Outcome measurement includes the measurement of program results, and the
one
quality of the way in which the service is delivered (such as how long it takes customers to get
the service).
Why Measure Outcomes?
Outcome measurement serves a number of basic and vital governmental purposes:
 It helps service managers apply whatever resources they have to problem areas identified
by the outcome information, to get the best use from limited resources.
 It provides information to public officials as to the extent to which the program is
“winning” or “losing,” thereby helping provide improved services to citizens—by
motivating public employees to continually improve the quality and outcomes of the
services they are delivering.
 It identifies the extent to which service quality and outcomes have changed after service
improvement actions have been taken.
 It helps in budgeting, so that resources are allocated in ways most likely to produce the
maximum benefit to citizens.
 It makes public agencies more accountable for results to elected officials and the public.
 It can increase the public’s trust in the government.
Chapter Two
2.1. Service Quality Dimensions
The term Service Quality is an association of two different words; „service‟ and quality. Service
means “any activity or benefit that one party can offer to another that is essentially intangible and
does not result in the ownership of anything”. Quality has come to be recognized as a strategic
tool for attaining operational efficiency and better performance of business. Service quality
means the ability of a service provider to satisfy customer in an efficient manner through which
he can better the performance of business.
The concept 'service quality' is not an independent term, means; its formation depends upon
several factors related to service and service firms. These factors are
Reliability is defined as the ability to perform the promised service dependably and accurately.
In broad sense reliability means, service firms' promises about delivery, service provisions,
one
problem resolutions and pricing. Customers like to do business with those firms, who keep their
promises. So it is an important element in the service quality perception by the customer and his
loyalty. Hence the service firms need to be aware of customer expectation of reliability. In the
case of banking services, the reliability dimension includes - regularity, attitude towards
complaints, keep customers informed, consistency, procedures etc.
Responsiveness is the willingness to help customers and to provide prompt service. This
dimension focuses in the attitude and promptness in dealing with customer requests, questions,
complaints and problems. It also focuses on punctuality, presence, professional commitment etc.,
of the employees or staff. It can be calculated on the length of time customers wait for assistance,
answers to questions etc. The conditions of responsiveness can be improved by continuously
view the process of service delivery and employees attitude towards requests of customers.
Assurance can be defined as employee's knowledge, courtesy and the ability of the firm and its
employees to inspire trust and confidence in their customers. This dimension is important in
banking, insurance services because customers feel uncertain about their ability to evaluate
outcome. In some situations like insurance, stock broking services firms try to build trust and
loyalty between key contact persons like insurance agents, brokers etc and individual customers.
In banking services "personal banker" plays the role of key contact person. This dimension
focuses on job knowledge and skill, accuracy, courtesy etc of employees and security ensured by
the firm.
Empathy Another dimension of service quality is the Empathy dimension. It is defined as the
caring, individualized attention provides to the customers by their banks or service firms. This
dimension try to convey the meaning through personalized or individualized services that
customers are unique and special to the firm. The focus of this dimension is on variety of
services that satisfies different needs of customers, individualized or personalized services etc. In
this case the service providers need to know customers personal needs or wants and preferences.
Tangibility The fifth dimension of service quality is the Tangibility which is defined as the
appearance of physical facilities, equipments, communication materials and technology. All
these provide enough hints to customers about the quality of service of the firm. Also, this
one
dimension enhances the image of the firm. Hence tangibility dimension is very important to
firms and they need to invest heavily in arranging physical facilities.
2.2. Service Excellence and Its Importance
Johnston, R. & Clark, G. have written in their book Service operations management book that
Service Excellence means that it is not about exceeding the expectations of customers, but
primarily about “delivering what is promised and dealing well with any problems and queries
that arise”. Or Johnston, R. has said in other words that it is all about the organizations being
“easy to do business with”.
When you go beyond the expectations of your customers and offer an industry-leading
experience that truly bowls over them – then such activity is understood as Service Excellence.
Importance of Service Excellence
1. Attract more customers
More the number of customers, who avail of your service, more will be your profits. So, it is
beneficial to have more customers. Service excellence helps you do so. It enables you to create a
good impact on your current customers. The customers who are happy and satisfied with your
service spread the word.
2. Less negative feedback
The success of the service provided depends on the input the consumers give. Positive feedback
adds a feather to the cap, whereas negative feedback drags the service provider’s position down.
Hence, the service should be excellent to minimize negative feedback.
3. Lesser clashes with the customers
In the case of bad service, the customers get agitated and file complaints against the same. It can
cause substantial losses to the company. However, if you consistently provide excellent service,
there are far lesser chances of getting into clashes with the customers.
4. Profitability
one
Apart from the benefits of having a good reputation and positive feedback, the tangible benefit of
service excellence is the profit the company gains.
For a service that is assured of excellent quality, consumers are ready to pay higher prices. Also,
the customer’s network continues increasing, which helps in getting more revenue and, in turn,
increases profits.
5. Branding
Branding is the process of establishing a brand in the market. We all know about companies that
have been providing the same services for over decades but have still stood firm because of
service excellence.
2.3. Delivering Customer-Oriented Service Culture
A customer oriented service culture means that a company focuses on its customers, their
requirements, and needs. It values them over anything else, responds to them quickly and
efficiently.
Importance
1. More loyal customers
The thing is people like being treated nicely. They like to acquire memorable experiences. And
they want their problems and issues resolved quickly. A customer service oriented culture is
exactly about this. Your team should be willing to build something more meaningful than just
business-customer relationships.
2. Word of mouth
Loyal customers are great just as they are, but they can also be extremely beneficial for your
business. Word of mouth is what everybody wants to master these days (and only a few really
did). People trust recommendations from their friends and family more than the most creative ad
in the world.
one
2.4. Understanding Ourselves and the Customers
Seek direct feedback from your customers by asking them what they need, want and expect, so
that you can obtain an understanding of their priorities. You will also gain insights into what they
value from the service/product; this will enable more effective allocation of resources and
services. This process of determining customer expectations will identify things that are both
realistic and unrealistic for the public sector to provide. After identifying service improvements
that can be reasonably provided, ensure they are in line with customer expectations. Expectations
should be openly discussed and managed.
Customers do not really buy the products or services; they buy the solutions to problems. The
better we solve their problems, the more appreciative they are, and the better their experiences in
dealing with your business. The better we know our customers, the better we can anticipate their
needs and priorities. Communicate regularly with your customers through conversation and
exchange of ideas to become keenly aware of their wants and needs-and better able to satisfy
them.
Therefore, understanding service needs and priorities of customers is the key to giving them
good service. To give good customer care you must deliver what you promise. But great
customer care involves getting to know your customers so well that you can anticipate their
needs and exceed their expectations. To understand your customers well, you need to be attentive
to them whenever you are in contact with them. The potential rewards are great: you can increase
customer loyalty and bring in new business through positive word-of-mouth recommendation.
2.5. Skills in Building Customer Satisfaction
Customer service skills are traits and practices that equip you to address customer needs and
foster a positive experience. In general, customer service skills rely heavily on problem solving
and communication. Customer service is often considered a “soft skill,” including traits like
active listening and reading both verbal and nonverbal cues.
Customer service skills are the set of behaviors you rely on when interacting with a customer.
They can also be useful when following up after an initial conversation.
one
Communication;- You will need to be responsive in a timely manner. You will need to
communicate with them in a clear, easy-to-understand way to solve the problem.
Empathy;- Your interactions may begin with someone who is frustrated or unhappy. It is
important that you understand and identify with the feelings of others and communicate
accordingly.
Patience;- Clients and customers might ask several questions, be unhappy or ask you to repeat
instructions several times. Patience is important to keep the conversation on track, remain
personable and provide a positive experience.
Technical knowledge;- To effectively solve problems, you will likely need to know a bit of
technical or industry knowledge to help them resolve the issue at hand.
Organization;- The ability to stay focused and organized is crucial to any customer service agent.
You’ll need to allot your time effectively. Therefore, learning to prioritize customer issues is key
in order to identify the most pressing issues.
Speed;- When working as a customer service agent, speed is of the essence. You’ll be fielding a
lot of demands, and it’s important to use your customer satisfaction skills to try to resolve issues
on the first call . Besides, while on the phone with a customer, you’ll need to be on different
fronts at once: listening to the customer, looking at their information, and finding a solution to
their problem.
Necessary customer service skills include:
Active listening
Adaptability
Attentiveness
Conflict resolution
Creativity
Decision-making
Dependability
Effective communication
Empathy
Friendliness
Knowledge of your product or service
thinking
Open-mindedness
Patience
Quick
one
Reading physical and emotional cues
Responsiveness
Timelines
2.6. Customer Perception and Expectations in Services
Service Quality is crucial in any business as it helps create the bond between the business and its
clients. In today’s competitive business environment, service quality is very important to attract
and retain customers. This is due to the fact that customers derive their perceptions of service
quality on the levels of satisfaction they experience with a particular business. Businesses need
to be able to satisfy customers and meet their expectations of service quality in order to gain
competitive advantage. Thus marketers need to continually assess customers’ expectations of
service quality in order to avoid customer dissatisfaction.
Customer expectations are beliefs about service delivery that function as standards or reference
points against which performance is judged.
Failure to understand the levels of service customers expects can mean losing a customer to
competitors who are able to meet customers’ expectations and therefore be at a risk of losing
business.
Customers hold different types of expectations about service, the highest type of these are
desired service and adequate service. Desired service is the level of service the customer hopes to
receive. It is a combination of what customers believe “can be” and “should be”. The
expectations signal the level of customer hopes and wishes and belief that they may be fulfilled,
thus failure to meet these expectations may result to customers cutting down on purchase.
Customers generally accept that the service would not always be performed according to their
expectations and this is formerly known as adequate service. Adequate service is the level of
service that customers will accept. Though customers’ hopes and wishes may still be high, they
however have a certain level of understanding in cases where receiving desired service does not
seem possible at all. For example customers are used to the self-service approach used in
supermarket and therefore have certain levels of understanding or tolerance towards food
retailers’ service delivery.
Chapter Three
one
3.1. Employees’ Roles in Service Delivery
Employees are key drivers of sustained business success in companies. The front-line service is
enormously important in any business. They are responsible for understanding customer needs
and for interpreting customer requirements in real time. By focusing on the critical role of
service employees and by developing strategies that lead to effective customer-oriented service,
organizations can begin to close the service performance gap.
Service employees, both the ones working in the front line and those who support them in the
back office, are an inseparable part of the service and their performance is crucial for the success
of the service delivery. In order to perform well, front line employees must enact their role in the
service delivery efficiently and effectively. Their role in the service delivery system is either
provided by their supervisors or described in a formal job description, blueprint etc. and it
reflects customer needs, standards set by management and service level agreements. Hence, by
effectively performing their predefined role, service employees can contribute to the
achievement of the company’s quality standards and bridge the gap between service delivery and
customer expectations. Based on the above argument, it is reasonable to suggest that there is
strong relationship between employees’ role performance and several positive organizational
outcomes, such as increased service quality.
The focus is on service employees because they are the service, they are the organization in the
customer’s eyes, and they are the marketers. Thus, investment in the employees to improve the
service equals to making a direct investment in the improvement of a manufactured product.
The production and consumption of service is simultaneous, and the service employee is directly
in contact with the customer, and provides the entire service. So the service quality is affected by
the service employee to a great degree. There is concrete evidence that satisfied employees make
for satisfied customers and satisfied customers in turn can reinforce employees’ sense of
satisfaction in their job. Unless service employees are happy in their job, customer satisfaction
will be difficult to achieve. Employees who feel they are treated fairly by their organizations will
treat customers better, resulting in great customer satisfaction. Therefore, employee satisfaction,
customer satisfaction and customer loyalty reinforce each other over time.
3.2. Customers’ Roles in Service Delivery
one
Service experiences are the outcomes of interactions between organizations, related
systems/processes, service employees and customers. In many services customers themselves
have vital roles to play in creating service outcomes and ultimately enhancing or detracting from
their own satisfaction and the value received. This is true whether the customer is an end
consumer (for example, consumers of health care, education, personal care, or legal services) or
a business (for example, organizations purchasing maintenance, insurance, computer consulting
or training services). In all of these examples, customers themselves participate at some level in
creating the service and ensuring their own satisfaction.
The level of customer participation required in a service experience varies across services. In
some cases, all that is required is the customer’s physical presence (low level of participation),
with the employees of the firm doing all of the service production work, as in the case of a
symphony concert. Symphony-goers must be present to receive the entertainment service, but
little else is required once they are seated. In a business-to-business context, examples of services
that require little participation are less common. One example is that of providing plant and
flower interior landscaping services. Once the service has been ordered, little is required from the
organization other than to open its doors or provide access to the service provider to move plants
in and out.
Consumer inputs are required to aid the service organization in creating the service (moderate
level of participation). Inputs can include information, effort or physical possessions.
In some situations, customers can actually be involved in co-creating the service (high level of
participation). For such services, customers have essential production roles that, if not fulfilled,
will affect the nature of the service outcome. All forms of education, training and health
maintenance fit this profile. Unless the customer does something (e.g. studies, exercises, eats the
right foods), the service provider cannot effectively deliver the service outcome. Similarly, an
organization seeking training services for its employees will need to help define the nature of the
training, identify the right employees for the training, provide incentives for them to learn and
facilitate their use of the training on the job. If the organization does not do this, it and the
employees involved will not receive the full benefits of the service.
the customer as productive resource;
one
the customer as contributor to quality, satisfaction and value; and
the customer as competitor to the service organization.
Customers as productive resources
Customer input can affect the organization’s productivity through both the quality of what they
contribute and the resulting quality and quantity of output generated. Customers’ inputs help in
increasing the productivity of the firm. Customers contribute inputs, much like employees, which
impact the organization’s productivity both via the quantity and quality of those inputs and the
resulting quality of output generated (Mills et al., 1983). For example, in contributing
information and effort in the diagnoses of their ailments, patients of a healthcare organization are
part of the service production process. If they provide accurate information in a timely fashion,
physicians will be more efficient and accurate in their diagnoses. Thus, the quality of the
information patients provide can ultimately affect the quality of the outcome. Furthermore, in
most cases, if patients follow their physician’s advice, they will be less likely to return for
follow-up treatment, further increasing the healthcare organization’s productivity.
Customers as contributors to quality, satisfaction and value
Another role that customers can play in services delivery is that of contributor to their own
satisfaction and the ultimate quality of the services they receive. Customers may not care that
they have increased the productivity of the organization through their participation, but they
probably do care a great deal about whether their needs are fulfilled. Effective customer
participation can increase the likelihood that needs are met and that the benefits the customer is
seeking are actually attained. This is particularly apparent for services such as health care,
education, personal fitness, weight loss, and others where the service outcome is highly
dependent on customer participation. In these cases, the customer is an integral part of the
service and unless he/she performs his/her role effectively, the desired service outcome is not
possible.
Customers as competitors
In many situations, customers (whether individuals or companies) have the choice of purchasing
services in the marketplace or producing the service themselves, either fully or in part.
one
Customers in a sense are competitors of the companies that supply the service. The decision
whether to produce services for themselves (internal exchange) versus have someone provide the
service for them (external exchange) is a common decision for consumers. For example, a car
owner who needs maintenance on his car can choose to do all his own maintenance (assuming he
has the skills), to have someone else do all the maintenance tasks, or to do some tasks himself
(e.g. changing oil) while reserving more complex tasks for a car maintenance shop. At one
extreme, the car owner does all of his own maintenance, while at the other he pays to have
someone do everything for him. Parallel examples can be imagined for child care, landscaping,
home maintenance, and other services needed by households. “Full participator”, if he/she
possesses the motivation and the needed skills, can be regarded as a prime candidate to engage in
internal exchange and produce the service without the aid of a service provider. Similar internal
versus external exchange decisions are made by organizations. Firms frequently choose to
outsource service activities such as payroll, data processing, research, accounting, maintenance
and facilities management. They find that it is advantageous to focus on their core businesses and
leave these essential support services to others with greater expertise.
Chapter Four
E-Governance and Public Service Delivery
Delivering Service through Electronic Channels
In the modern information society, innovations in information and communication technology
have influenced citizens’ behavior as well as their desired information requirements by having
fundamentally changed the way how people work and communicate. This information
technology-induced development alters social and cultural as well as commercial and
administrative structures. Especially the Internet, which allows various forms of information
access, interaction opportunities, as well as knowledge creation and sharing, has intensified this
digital transformation. Digitalization, networking, and globalization connect individuals and
organizations on a worldwide level and reduce the importance of geographical boundaries. The
consequences affect both the private and the public sector. Concerning the latter, the rapid
evolvement from simple information access to providing complex processes and powerful tools
and networks change the public service provision and process landscape (Chen, Gibson, and
one
Geiselhart 2006; Dawes 2008). Thus, governments worldwide pursue e-government solutions,
which are particularly relevant for themselves and their stakeholders (Wirtz, Mory, and Ullrich
2012).
Citizens, for instance, demand a more flexible and more transparent administration as well as an
increasing range of services that are provided online via the Internet. From a business
perspective, a consistent, sustainable implementation of e-government is highly relevant for the
economy since an unrestricted online availability of public services is regarded as an essential
factor in international competitiveness. In this regard, e-government reflects an important
starting point for satisfying these requests. And apart from that, governments aim at optimizing
efficiency and effectiveness through increased administrative productivity as well as substantial
cost reductions (Wirtz et al. 2014).
E-Government and E-Governance
Definitions
E-government is a generic term for web-based services from agencies of local, state and federal
governments. In e-government, the government uses information technology and particularly the
Internet to support government operations, engage citizens, and provide government services.
The interaction may be in the form of obtaining information, filings, or making payments and a
host of other activities via the World Wide Web (Sharma & Gupta, 2003,). E-government is
defined by other sources as follows:
United Nations (www.unpan.org) definition (AOEMA report): “E-government is defined as
utilizing the Internet and the world-wide-web for delivering government information and
services to citizens.
Global Business Dialogue on Electronic Commerce - GBDe (www.gbde.org) definition
(AOEMA report): “Electronic government (hereafter e-Government) refers to a situation in
one
which administrative, legislative and judicial agencies (including both central and local
governments) digitize their internal and external operations and utilize networked systems
efficiently to realize better quality in the provision of public services.”
Definition
of
the
Working
Group
on
E-government
in
the
Developing
World
(www.pacificcouncil.org): E-government is the use of information and communication
technologies (ICTs) to promote more efficient and effective government, facilitate more
accessible government services, allow greater public access to information, and make
government more accountable to citizens. E-government might involve delivering services via
the Internet, telephone, community centers (self-service or facilitated by others), wireless devices
or other communications systems.” While definitions of e-government by various sources may
vary widely, there is a common theme. E-government involves using information technology,
and especially the Internet, to improve the delivery of government services to citizens,
businesses, and other government agencies. E-government enables citizens to interact and
receive services from the federal, state or local governments twenty four hours a day, seven days
a week.
E-Governance
Definitions
E-governance, meaning ‘electronic governance’ is using information and communication
technologies (ICTs) at various levels of the government and the public sector and beyond, for the
purpose of enhancing governance (Bedi, Singh and Srivastava, 2001; Holmes, 2001; Okot-Uma,
2000). According to Keohane and Nye (2000), “Governance implies the processes and
institutions, both formal and informal, that guide and restrain the collective activities of a group.
Government is the subset that acts with authority and creates formal obligations. Governance
need not necessarily be conducted exclusively by governments. Private firms, associations of
firms, nongovernmental organizations (NGOs), and associations of NGOs all engage in it, often
in association with governmental bodies, to create governance; sometimes without governmental
authority.” Clearly, this definition suggests that e-governance need not be limited to the public
sector. It implies managing and administering policies and procedures in the private sector as
well.
one
The UNESCO definition (www.unesco.org) is: “E-governance is the public sector’s use of
information and communication technologies with the aim of improving information and service
delivery, encouraging citizen participation in the decision-making process and making
government more accountable, transparent and effective. E-governance involves new styles of
leadership, new ways of debating and deciding policy and investment, new ways of accessing
education, new ways of listening to citizens and new ways of organizing and delivering
information and services. E-governance is generally considered as a wider concept than egovernment, since it can bring about a change in the way citizens relate to governments and to
each other. E-governance can bring forth new concepts of citizenship, both in terms of citizen
needs and responsibilities. Its objective is to engage, enable and empower the citizen.”
TYPES / MODELS OF E GOVERNMENT
E-government offers services to those within its authority to transact electronically with the
government. These services differ according to users’ needs, and this diversity has given rise to
the development of different type of e-government. According to the World Bank, (2002); Jeong,
(2007) the e-Government delivery models can be briefly summed up as follows;
G2G (Government to Governments)
G2B (Government to Businesses)
G2C (Government to Citizens)
G2E (Government to Employees)
Government to Government Model (G2G)
one
According to Gregory (2007) G2G refers to the online communications between government
organizations, departments and agencies based on a super-government database. Moreover, it
refers to the relationship between governments. The efficiency and efficacy of processes are
enhanced by the use of online communication and cooperation which allows for the sharing of
databases and resources and the fusion of skills and capabilities. It renders information regarding
compensation and benefit policies, training and learning opportunities, and civil rights laws in a
readily accessible manner (Ndou,2004). The vital aim of G2G development is to enhance and
improve inter-government
organizational
processes by streamlining cooperation and
coordination.
Governments depend on other levels of government within the state to effectively deliver
services and allocate responsibilities. In promoting citizen-centric service, a single access point
to government is the ultimate goal, for which cooperation among different governmental
departments and agencies is necessary. G2G facilitates the sharing of databases, resources and
capabilities, enhancing the efficiency and effectiveness of processes. It represents internal
systems and procedures which form the backbone of public organizations. G2G involves sharing
data and conducting electronic transactions between governmental actors. This includes both
intra and inter-agency interactions between employees, departments, agencies, ministries and
even other governments.
Government-to-Business (G2B)
Government to business, or G2B, is the second major type of e-government category. G2B can
bring significant efficiencies to both governments and businesses. G2B include various services
exchanged between government and the business sectors, including distribution of policies,
memos, rules and regulations. Business services offered include obtaining current business
information, new regulations, downloading application forms, lodging taxes , renewing licenses,
registering businesses, obtaining permits, and many others. The services offered through G2B
transactions also play a significant role in business development, specifically the development of
small and medium enterprises (Pascual, 2003). The opportunity to conduct online transactions
with government reduces red tape and simplifies regulatory processes, therefore helping
businesses to become more competitive.
one
Government-to-Citizens (G2C)
G2C deals with the relationship between government and citizens. It allows citizens to access
government information and services instantly, conveniently, from everywhere, by use of
multiple channels. Government-to-Citizens (G2C) model have been designed to facilitate citizen
interaction with the government. The focus of G2C is customer centric and integrated electronic
services where public services can be provided based on a “one-stop shop” concept. This implies
that citizens can carry out a variety of tasks, especially those that involve multiple agencies,
without needing to initiate contacts with each individual agency. A single access point also
reinforces citizen participation in democratic processes since they can access administrative
proceedings readily and articulate their needs more conveniently to public officials. (Ndou,2004)
While e-Administration initiatives improve internal government processes, e-Citizens and eServices deal with improving communication and quality of service between government and
citizens. Finally, e-Society initiatives concern interactions of government with businesses and
civil communities. In applying the idea of G2C, customers have instant and convenient access to
government information and services from everywhere anytime, via the use of multiple channels.
In addition to making certain transactions, such as certifications, paying governmental fees, and
applying for benefits, the ability of G2C initiatives to overcome possible time and geographic
barriers may connect citizens who may not otherwise come into contact with one another and
may in turn facilitate and increase citizen participation in government (Seifert, 2003).
Government to Employees (G2E)
Government to employee is the least sector of e-government in much e-government research.
Some researchers consider it as an internal part of G2G sector and others deal with it as a
separate sector of e-government (Riley, 2001). G2E refers to the relationship between
government and its employees only. The purpose of this relationship is to serve employees and
offer some online services such as applying online for an annual leave, checking the balance of
leave, and reviewing salary payment records, among other things (Seifert, 2003). It is a
combination of information and services offered by government institutions to their employees to
interact with each other and their management. G2E is a successful way to provide e-learning,
one
bring employees together and to encourage knowledge sharing among them. It gives employees
the possibility of accessing relevant information regarding compensation and benefit policies,
training and learning opportunities, and allowing them access to manage their benefits online
with an easy and fast communication model. G2E also includes strategic and tactical
mechanisms for encouraging the implementation of government goals and programs as well as
human resource management, budgeting and dealing with citizens (Ndou, 2004).
IMPORTANCE OF E- GOVERNMENT
Seifert & Bonham (2003) provides the following benefits of e-government;
Cheaper: a website can be a very cost-effective way to exchange information, both for its owner
and its users. From the agency's point of view, for instance, a website can reduce the number of
enquiries agency staff has to deal with, by providing answers to the most common questions or
queries (also known as FAQs, Frequently Asked Questions ) it normally receives, and therefore
reduce the amount of staff effort and cost needed to respond to them. In general, a website makes
it possible to publish extensive information on regulations, procedures and other aspects of an
organization’s work, which would otherwise need to be disseminated through direct human
intervention: this means an agency can dedicate less staff time to dissemination activities,
allowing either for a reduction in staff numbers, or for their employment elsewhere in the
agency. Websites also represent a cheaper alternative to the production and dissemination of
printed materials, like leaflets, letters and so on. A website can also represent a cheaper
communication alternative from the users' point of view , especially if they are located in remote
regions or abroad, as a phone call to an internet provider is often cheaper than a long-distance
call, or a physical visit to the agency.
Quicker: web publishing is immediate, and this enables agencies to introduce changes to their
public literature easily and relatively quicker than with traditional and more costly methods
depending on print. The immediacy of web publishing also allows the fast release of news and
other information items to the public, which an agency may find useful to, say, respond to
promptings from the media, or act in moments of crisis. In addition to this, if maintained
properly a website provides information 24 hours a day, 7 days a week.
one
An e-government service also creates social benefits for the citizens of a country. For countries
that have a widely dispersed population an e-government service allows the citizens situated in
remote areas to have access to the same services that citizens within the major cities would
enjoy. The ability of an e-government service to be accessible to citizens irrespective of location
throughout the country brings the next and potentially biggest benefit of an e-government
service. In several countries there is a high level of voter apathy, either due to grievances with
government policy or to voters not bothering to leave their homes to vote. Developing a secure
portal online that allow citizens to register their vote would not only give citizens in remote areas
the chance to vote from their own home with the click of a mouse but would, in addition, allow
the general population with busy working lives the chance to vote very quickly on their lunch
break at their desk.
Another benefit of implementing an e-government service is the greater transparency of the
service provided.