PM Essence

Converting Intangibles to tangibles…. to achieve Customer Satisfaction

– Kapil Gupta, PMP
Projects by definition are meant to produce Products or Services or both as end results. Sometimes they produce products and at some other times services or just results. We should evaluate project requirements and deploy suitable solutions to challenges posed to Projects. Understanding and then applying Product and Service Characteristics can help improve Project deliverables and thereby delivering Customer Satisfaction and Profitability to the Project..

In this article, let us evaluate the topic of Project and Project Management with respect to its requirements, i.e. similarities and differentiation from Products and Services. Key Differentiating factors between Products and Services can be differentiated by four key parameters, i.e. Intangibility, Inseparability, Heterogeneity, Perishability of Services Versus Tangibility, Separable, Homogeneity and Un-perishability Characteristics of Products as shown in figure 1.

These factors differentiate the Opportunities and Challenges that vary between Products and Services. Figure 1 summarizes the key points to be noted. Coming to evaluating Project and Project Management with respect to Products and Services life cycle, we find a very close interrelationship with the characteristics of both the Products and Services. On one hand, a Project exhibits Product requirements by having tangible, measurable deliverables and final product, which is bought at a price, purchased (owned) and then consumed, Projects exhibit service requirements by allowing customer to first decide the right service to be bought, and then get it performed. Projects are initiated, results pre-determined and agreed and come with financial investments, by sponsor or initiator. Benefits are realized during the project lifecycle when the final product is being produced. It is then imperative to understand and know the product and service aspects of any project and project management, which will help us understand how they can deliver product or service value.

As products and services are defined by their tangibility quotient on the tangibility scale, projects can also be classified according to their tangibility quotients and suitable planning performed to address the needs of specific projects. Customer involvement enhances service satisfaction. This factor is crucial as it relates to customer interactions with Project team while the project deliverables are being prepared for final delivery.

Although service by definition does not result in permanent ownership of the product or the facility, (e.g. Movie ticket, can be bought only once for a 3 hour experience and at end of the movie one does not own anything, except the experience and memory of the 3 hours spent), the key differentiating factor for projects is that services performed during projects do result in permanent ownership of final deliverables Fig. 2 highlights the differences between products, services and projects. Product lifecycle is linear consisting of Supplier, Manufacturer, Distributor, Retailer. Purchaser then consumes the products owned. Service lifecycle consists of Purchaser, Supplier, Manufacturer and then Consumer while it is still being performed. Services are delivered by employees who are in constant or close touch to customer. Hence, employee services and customer satisfaction are the main elements of success for any service or project interaction. It is therefore very important to engage customer closely and ensure employee and customer satisfaction to be achieved together in order for any project to be successful.

These factors, although are intangible from customer perspective (when the definition that customer is not paying for these services is used), they indeed are part of those critical ‘tangible’ attributes that determine the success criteria of the projects. Hence companies and project managers should have to focus on this key intangible deliverable, which helps in bringing customer satisfaction and hence future business and revenues for the business. Whatever, intangibles are created are real ‘core competencies’ or assets or best practices of the company that forms the Organisation Process Assets (OPA) which can be leveraged as inputs for all future projects.
In summary, the route to Tangible Growth for any company or project is to handle the Intangible part of the project with complete planning and care and ensure full compliance to all the service industry standards. Only then the final product will be accepted with complete customer satisfaction with a Win-Win-Win situation for Customer, Employees and the Company.