Service Quality at Community Bank of Perth - Essay Example

Service Quality at Community Bank of Perth Name Institution Service Quality at Community Bank of Perth Banking sector is the most expansive service industry that caters to the needs of different categories of people – from rich to poor. Service quality is viewed as one of the most significant determinant of performance standard in commercial banks. It is along these lines that majority of banks have been implementing different forms of quality initiatives (Yusof & Aspinwall, 2000). The paper herein seeks to present facts regarding how entities in the industry go about providing quality services for their customers. Due to expansive range of activities that commercial banks offer to their distinguished customers, credit services have been picked as the major area of study. The selection has been made since the service is sought by people of all income classes though in varying magnitudes. The desire by businesses to create real value while serving their customers has called for innovative methods of improving service delivery. Industrialists of modern times have directed research and development initiatives to these improvements. Approximately two decades ago the concept of total quality management has particularly evolved to address the numerous challenges that developers of service design have been facing. Unlike many other design tools this technique is more customer-oriented providing the managers a chance to evaluate the efficiency of their operations at the points of customer service (Meredith & Shafer 2010). The focus is specifically on continuously improving the quality of services. The concept of total quality management is a method of service improvement that is customer focused. It is a technique particularly applicable in situations where a service provider realizes that loyal customers are changing their perceptions. It checks the problem of customers wanting to dissolve their relationship with their current service provider following constant dissatisfaction (Yusof & Aspinwall, 2000). This would be an awkward situation to be in by any player in the industry and hence the need to write this report. At community bank of Perth there are efforts to apply service blue printing as a method of meeting customer needs and ensuring that strong relationship is built between the bank and customers. This has been the culture of the bank going by its rich history on customer acquisition and retention. Operations management requires that activities be grouped in stages and each departmental responsibility to be clearly defined and distinct from the other (Meredith & Shafer 2010). This seems to be the idea held by the designer of the current service activity at Community Bank of Perth. Specification of duties is given high regard with the duties almost executed by different officers of service functions. In the loan application process, there are five stages designed systematically such that the completed work of one department becomes the first activity function of the succeeding department. For instance, once the loan agent facilitates the loan application by the customer the details are immediately passed on to the loan processor to evaluate the details specified in the documents. The works of each service function complements the work of the other department. This is done in the spirit of integration of the banks sum total of service delivery framework. In other words different services work independently but their functions are interrelated and each section benefits from the efforts of the other. This is the case between the loan processing stage and loan application. In this case, if there are any discrepancies or problems in the information given by customer, at the loan processing stage, the officer consults with the loan agent for advice, including seeking verification from the customer if need be. There is special attention paid to service evidence. This is exemplified in the level of documentation that is involved is the whole process of loan issuance. The process begins with the customer filling the loan application form, and signing of papers to authorize the loan check. The process continues with different documentation being applicable for each stage. All this is done as proof of the existence of some business relationship between the bank and their client. Formal papers act as a go ahead for execution of activities, with the papers acting as the sanction that the process is legal. There are certain weaknesses that make the services of the bank fail to reach the threshold of a quality service provider. One of those is lack of defined time frame during which loan application processes should last.. This can be, and is actually is a major source of dissatisfaction for the customers of Community Bank of Perth. Under normal circumstances, waiting is strenuous, but waiting indefinitely is even more hectic. One of the laws of the theory of constraints holds that indefinite waiting time seems longer than when the waiting time is defined. Also, waiting time off service seems longer than waiting time in the process of being served. The process followed by customers when applying for loan is undefined – that is there is no clear time frame between the point of customer’s first contact with the loan agent and the time when the customer’s account is credited with the money. This can be very tricky for a customer who wants to plan his/her financial affairs in advance. The process has some aspects of duplication of efforts. This is a case where the same duty is done twice but by different officers. The process demonstrated by the bank points to high level of unnecessary caution by the bank management. For instance, the loan closing agent performs calculations to ascertain the payment rates. Similarly the loan application does the same calculations when assessing the viability of the customer to be able to service the loan. These are two activities that are closely interrelated. It would be prudent therefore, to save time and effort by integrating these activities under one department and assigning their execution to one single officer. This move would shorten the process and reduce unnecessary customer contact. Finally, the system lacks properly defined roles for some stages. For example, the exact role of the loan servicing specialist at the new account establishment stage is not clear. What the lay out purports to be the work of this officer, looks to be the exact duty that the loan payment specialist does. There exists no clear line between these two responsibilities. If is undefined where the duties of stage four ends and where the duties of stage five begins. Under the normal way of working, verification for settlement of all previous loans of the client would be settled at the stage of the loan closing stage. It is imprudent to close the loan deal before the verification of the affairs of past loans. In the light of this, the rationale of the fourth stage becomes unnecessary. Instead the duties of maintenance of the new loan account should fall under the responsibility of the loan payment specialist in stage five. Redesigning the process would call for the application of concept of total quality management, so as to eliminate flaws and enhance the key functional areas. The numerous ideas are integrated in line with specified problems in an effort to align the business processes. The design should be sensitive to the organizational needs and particularly customer perceptions. The views of the customers must be analyzed keenly and form part of the information to be considered in formulating the design set up. The results of the system must be clearly forecasted and the time duration for each process properly ascertained. In today’s business environment competition is almost the major challenge to business. Any prudent manager will be better positioned to enhance service provision by applying the most satisfying service to clients. Today, customer retention is the tone of business (Ahmed, 2002). This feat cannot be realized until the proper customer experiences are created at the service point through quality service. It is imperative that the system adopted for customer service be directed towards creating good customer memories in an effort to solicit future relationship with the same client. Unique competitive advantage can be created by designing strategic customer interaction points. Banking industry, being a totally service oriented area cannot afford to be left behind in the field of crafting modern and effective service delivery frameworks (Prajogo & Sohal, 2003). The path to designing a service design for an activity is a multitasking undertaking. The initial step involves identifying the vital features or elements of the entire service activity. Over the time the designer understands interconnections between the various elements (Prajogo & Sohal, 2003). Then a special attention is paid to the problem areas subsisting in the process. A strategy to address the issues is formulated that should involve corrective actions as well as new additions that can help to improve the process. Finally, the lead strategist and top management create empathy with the users of the new system. An ascertainment should be made that all stakeholders fully understand the need for the new system and that they appreciate and identify themselves with the new set up of activities. Application of the concept of total quality management provides a reliable means of evaluating the efficiency of events at the customer server contact points. The moments of such interaction must have clearly organized events that show ahead of time the activities that should take place and the order they should follow. In a layout drafted for the purpose, lines should be drawn to separate events of the interactions. The frequency of interactions should be enough from the customers’ perspective. The outcome of each interaction need to meet the customers value expectations. Laying out a format of the service activity enables the operations manager identify areas of flaws or weaknesses and provides him/her with a chance to make timely corrective action (Al-Marri, Ahmed & Zairi, 2007). A customer service contact for created for each category of the loan. This section receives complaints from clients and directs them to the relevant officers for consideration. The section is also used for all communications that the bank may want to make with the clients. Each client is advised on the category that he/she falls to save him/her the confusion of not knowing who to contact for what. There are many factors that guide the perceptions of customer towards a service. Service providers need to probe further to identify the specifics of customer determinants. Executives of modern times need to come up with methods on how best the onstage and backstage operations should be linked to maximize customer memories created out of the service activity. References Ahmed A.M. (2002). Virtual integrated performance measurement. International Journal of Quality & Reliability Management, 19(4), 414-414. Al-Marri K., Ahmed A.M. & Zairi M. (2007). Excellence in service: an empirical study of the UAE banking sector. International Journal of Quality & Reliability Management, 24 (2), 164-176. Meredith J.R. & Shafer S.M. (2010). Operations Management for MBAs, 4th (edn.) New York: John Wiley & Sons. Prajogo D.I. & Sohal A.S. (2003). The relationship between TQM practices, quality performance, and innovation performance. International Journal of Quality & Reliability, 20, 901-918. Yusof S.M. & Aspinwall (2000). Total quality management implementation frameworks: comparison and review. Total quality management, 11(3), 281-294. Read More