The outcomes that customers want to achieve are the reason why they purchase or use a service. Typically this will be expressed as a specific business objective (e.g. to enable customers of a bank to perform all transactions and account management activities online or to deliver state services to citizens in a cost-effective manner). The value of the service to the customer is directly dependent on how well a service facilitates these outcomes.
Although the enterprise retains responsibility for managing the overall costs of the business, they often wish to devolve responsibility for owning and managing defined aspects to an internal or external entity that has acknowledged expertise in the area.
This is a generic concept that applies to the purchase of any service. Consider
financial planning. As a customer, we recognise that we don’t have the expertise, or the time, or the inclination to handle all the day-to-day decision-making and management of individual investments that are required. Therefore, we engage the services of a professional manager to provide us a service. As long as their performance delivers a value (increasing wealth) at a price that we believe is
reasonable, we are happy to let them invest in all the necessary systems and processes that are needed for the wealth creation activities.
In the past, service providers often focused on the technical (supply side) view of what constituted a service, rather than on the consumption side. Hence it was not unusual for the service provider and the consumer to have different definitions and perceptions of what services were provided, or for the provider to know all about the cost of individual components, but not the total cost of a service that
the consumer understood.