Revenue

Revenue measures the extent of service operations

Examples:

  • Service business revenue (historical development)

  • Service business revenue / total revenue (significance of service business to the company

Profit

Profit measures the profitability of service business

Examples

  • service revenue – service costs (= service profitability)

  • (service revenue – service costs) / (total revenue – total costs) (= relative profitability of service operations)

Total process costs

Measures the ...

Process measures

e.g., response time

Value

Service business should create value both to the customer and provider. This requires collaborative analysis and measurement of joint efforts and value creation.

Examples

  • total value (price) of service agreement

Direct / indirect impacts

Strategic goals affect on long term. Achieving the goals can’t be measured directly, and there can be considerable time before strategies are implemented in measurable operations.

Impact and earning logic have to be addressed separately

  • earnings wise the impact of services is sometimes considered to be indirect

  • sometimes the impact can’t be measured directly as revenue, profit etc.

Challenge: financial measures are affected by the accounting systems and organizational interests in the companies (what kind of reports are wanted by the management, what reports are made public)

Service provider / customer / both combined impacts

Service has impact both on the service provider and the service customer. These can be evaluated separately but often the service is collaborative process between customer and provider. Service business solution should have positive impact to both. This requires collaborative analysis and measurement of joint efforts and value creation.