The definition of a service is the art to elaborate a standard workflow that produce a desired output at a fixed price. The price is determined on the basis of the prices of the local economy. Services definition produces a so called service template. It is used for the provision of standardised routine services for out-scaling. In the process desired outputs are transformed into products, which are negotiable in the real economy. Thus, the result of an investment becomes predictable in terms of scope and scale.
Services templates are designed by experts in exchange with involved service providers according to the steps below. Templates are documented on the AfricaRice wiki.
Step 1- Conception
Services are usually part of a project that requires different outputs to achieve a desired result / to reach a specific goal. Most outputs of a project can be produced by a corresponding service. It is recommended to list the various services that are required to complete the project and to outline a corresponding budget before starting with the definition of a particular service.Simplicity, evaluation of demand and the estimation of potential benefits are key factors of success.
Step 2 - General description of service
The description should comprise the following points:
Name of the service: The name should indicate the product that is delivered to the final beneficiary.
Justification / Problem statement: Information that justifies the investment. It describes the problem that the service addresses in the context of the goal of the action / project.
Objective / Purpose: Explaining how the service will contribute to the solution of the problem.
Outputs: List of measurable and tangible products & services that are delivered to the beneficiary.
Beneficiary: Denomination of the person (this might be an individual or an organisation) entitled to benefit form the service.
Selection criteria: Description of the criteria for the identification of a beneficiary.
Price: The price of the service
Step 3 - Define a work-flow
Services consist of a set of subsequent tasks that are organised in a work-flow towards a specific output. They usually require the involvement of various agents with complementary professional and social skills. Each task includes one or several activities that are carried out by a single agent without having to interact with another agent. It is recommended to start from the end and to think of the last task first in order to keep a clear focus on the result.
Step 4 - Definition of tasks
All tasks are defined according to the following structure:
Title: A simple name of the task indicating the main activity.
Activities and instructions: Description of the activities that have to be carried out by a Task Agent in order to complete the task. It comprises the description of the methodology, rules and regulation, which have to be observed.
Deliverable: This is a list of the products that must result from the task in quantitative and qualitative terms.
Source of verification: For each task a source and the modalities to verify the completion of the task must be indicated.
Task agent: Specification of the type of person(s) or organisation(s) that carries out the task. In includes the description of the required professional and social skills.
Expenditures: Detailed quantification of resources that are required on average to carry out the task. The different cost item are classified according in the following categories: transport, stationary, travel, casual labour, small equipment, communication and miscellaneous. For each cost item it will be indicated if the costs are covered by the project or by third parties. Cost items are grouped by those that are paid for by the project and those that are covered by third party contributions (in-kind) (see also 2.7 pricing of services below).
Honorarium: The amount that is paid to the Task Agent once he has completed the task.
Duration: Time during which the task must be completed.
Step 5 - Elaborate instructions
It is the description of the methodology, rules and regulation, which have to be observed, during the execution of the various tasks in order to get the desired result.
Step 6 - Forms
A minimum of three forms are required for work flow management:
Request form: The form that needs to be filled with for the formulation of a service request.
Answer form: The form that needs to be filled for the communication of the response.
Evaluation form: The form that captures feedback of the person to whom the answer was delivered.
Further forms might be required for the gathering of additional data and information.
Step 7 - Pricing of services
Pricing is done in negotiation with concerned service providers / task agents.
Basically a price of a service is determined by adding up all expenditures for goods and services that are required to carry out the various tasks and the honorarium of the involved Task Agents.
Pricing of services is carried out in four steps:
1. Gather local prices: A list is elaborated with the prices of all goods and services that are required to carry out the activities. It is an open list that is extended and up-dated according to need.
2. Pricing of a task: The price of a task is equal to the estimated expenditures for the resources that are required to carry out the task plus the honorarium of the involved Task Agent.
It starts with the estimation of the expenditures for resources that are required on average to complete a task by indicating the number of units for each of the required goods and services. The estimated quantities are multiplied with the corresponding prices and added in order to compute the price for expenditures.
Third party contributions: In some cases partners involved in service delivery might make an in kind contribution to assure the completion of a task (e.g. work time, office space). For reasons of transparency and reporting purposes their contribution must be acknowledged and if possible quantified (estimated) in order to avoid hidden costs that might need to be considered during subsequent scaling.
Example:
Cost Group | Cost category | Cost items | Covered by | Unit | Unit cost | Quantity | Effective Cost (project) | Total cost |
|---|---|---|---|---|---|---|---|---|
Expenditures | Transport | Local transport | Project | km | 0.15 | 10 | 1,50 | 1,50 |
Stationary | Paper | Project | sheet | 0.02 | 10 | 0,20 | 0,20 | |
Casual labor | Farmer | Project | fee | 3.05 | 1 | 3,05 | 3.05 | |
Communication | Phone calls | Project | min | 0.10 | 10 | 1.00 | 1.00 | |
Honorarium | Honorarium | Field agent | day | 15.24 | 0.5 | 7.62 | 7.62 | |
Third party contribution | Honorarium | Supervision by INRAB | ITRAC | day | 38.11 | 0.25 | 9.53 | |
Miscellaneous | Office space | ITRAC | day | 5.00 | 0.25 | 1.25 | ||
Total | 12,37 | 23.15 |
3. Define payment schedule: Since many service providers are poor, three scenarios are distinguished:
Scenario 1 –Expenditures for a service are below 50€: The total amount is paid upon delivery. All activities are pre-financed by the Task Agents.
Scenario 2 – Expenditures are equal or above 50€: An advanced payment is made for the expenditures and the rest is paid upon delivery. At most the advance is equal to total cost of expenditures. In all cases the honorarium is only paid upon delivery.
Scenario 3 – Expenditures for a batch of services are equal or above 50€: In some cases several services need to be delivered in a short period. For this purpose the National Service Coordinator can define batches of services. In this situation the cost for project expenditures of the tasks is multiplied by the number of services that need to be delivered. If the total amount of expenditures exceeds 50€ he will receive an advanced payment according to the rule described in scenario 2.
4. Pricing of a service: The price of a service is the sum of the prices for the tasks.
Step 8 - Quality management
For all tasks quality criteria and control procedures are defined. Quality control criteria and procedures should be straight forward and objective. It might include procedures for the payment of a premium to encourage the delivery of high quality services.
Step 9 - Optimisation
Work-flows are optimised in an iterative and participatory process with the aim to improve the effectiveness and cost efficiency.
