Three steps to start on service excellence
Towards the ‘Wow’ factor
At many organisations, service excellence is still in its infancy. Everyone knows the anecdotes within and outside their own organisation that illustrate services that are substandard – to put it mildly. In such cases, the IT department is insufficiently able to provide added value, or at least make its value visible, and to support users in their activities. This is a sorry state of affairs, not to mention a waste of talent and energy, on both the IT and the business side.
The lack of service excellence is not an issue of shortage of IT staff with the relevant know-how. However, the current structure of the organisation and its processes hampers an effective and efficient process. Many managers would use these terms to describe their own organisation. How do you ensure that the quality of services improves by leaps and bounds? Which preconditions will ensure that you obtain the appropriate focus in a service excellence initiative that prevents the freed up energy from promptly evaporating after a roaring start? A smart choice in changes can help improve service by leaps and bounds. There are enough domestic and foreign companies that have understood this notion and have realised a robust service. Of course success always depends on a large number of factors. But by making the first three steps, you can improve your chances of succeeding.
1. Ensure credibility through metrics & measurement
A business doesn’t run on good intentions, but on tangible results. This requires the necessary transparency; a valuable lesson learnt within IT in recent years is that communication is key in this respect. However, this can only be achieved if the recipient has faith in the sender’s credibility. And that’s where things can still go wrong. The solution is not to increase communication.
Effective communication starts with the basics: setting out clearly – in the recipient’s own language – what it is you actually do and how much you charge for it. Many IT departments have started with a simple dashboard to clarify the progress within projects. Figures on the current IT operation should also be made clear for the sake of service excellence. Show, for example, how many malfunctions (incidents) have taken place and how much they are costing. The latter is no easy task since the quantification of the direct and indirect costs of a malfunction is no exact science. However, the fact that you have made an attempt is more important than an accurate cost estimate. Start with a simple model that anyone can understand.
Effective communication starts with the basics: setting out clearly – in the recipient’s own language – what it is you actually do and how much you charge for it.
The choice of models often ignites the relevant discussions on the starting points and hypotheses. The first reports, which set out the number of incidents and the costs, are likely to contain figures that will raise eyebrows. Closer analyses and discussions will then form the starting point for both a refinement of the model and an improvement of the service management processes. This will make it instantly obvious that the registering of incidents can and must be done in a far better way to get the management information up to standard. All questions and comments lead to the dialogue that you want to initiate to position IT as a reliable party on the market.
The result of this process is a model that constantly gives an accurate picture of the direct and indirect costs. This information can be used as the basis for developing improvement plans that suddenly have a business case. Reducing the number of malfunctions by ten percent will save a certain amount of euros. The IT organisation can use this argument to explain to the business that investing in – the correct – IT and processes will save money. It will also help to dispel the notion that it will only cost money and will enable the IT organisation to work in a more targeted manner with improvements based on constructive feedback.
2. Use customer satisfaction as springboard for improvement efforts
The opinion of the user is an important standard for the quality of the service. You could see the measuring of satisfaction as the end result of all activities that have been conducted by IT. This results in a specific figure – good or bad – emerging from the measuring process. This is how many consumer surveys are done; with large numbers of anonymous respondents. Some IT organisations have been conducting annual customer satisfaction surveys for years. But it is difficult to estimate the value of the scores. What does your annual score of 6 or 7 mean?
It is much more compelling to view measurement as springboard for improvement efforts. You don’t need to regard employees as anonymous respondents. After all, you specifically want to involve them in the process. But it does influence the measurement process. Instead of conducting one sample survey per year, it is better to ask everyone for a general assessment of the IT service once a year. This can be done as a weekly process, so that you can keep track of developments and take immediate action when needed. You can also do targeted measuring by means of the so-called ‘moments of truth’ regarding the handling of incidents, for example, or the request for standard services (SSRs) and the submission of requests for change (RFCs). These outcomes provide the ITIL processes with valuable feedback and will, if done regularly, result in the development of a valuable closed loop for improving your service processes and therefore your customer service as a whole.
You don’t need to regard employees as anonymous respondents. After all, you specifically want to involve them in the process.
You can use this information for the targeted monitoring of the effectiveness of improvement plans. You can see right away whether the process changes have had any impact on the quality of the IT service as perceived by the end users. Plans can be adjusted immediately if the desired effect is not being achieved. Companies that have experience in the implementation of this approach often achieve dramatically improved service as well as a lower total cost of ownership, up to 15 percent of the total IT costs, at the same time. The main advantage is that actions and decisions are partly based on the experiences of end users rather than on guesswork. This makes it possible to apply the available resources to help improve the quality. The motivation of IT staff improves drastically when they see their hard work being translated into a high rating from end users. It also makes it easier to channel dissatisfaction. An active approach has a two-pronged effect: employees discover that something is actually being done with the feedback; and IT staff come to see the anonymous IT complainer as a real person with a business-related problem.
Each month, the evaluations can lead to further agreements. This can prompt honest discussion on where improvements are needed: within a specific unit or country or for a specific group of employees. In an outsourcing relationship, the information helps to determine the added value of the provider and to assist him in making improvements from a positive perspective. Regular measurements already help to improve the communication automatically as a result of all the efforts that ensue from them. Results, in the form of a summary supplemented with the conclusions and follow-up steps, can also be fed back to the entire organisation, for example via the intranet.
3. Make performance-based agreements with providers
In a classic outsourcing deal, each euro that the provider invests is at the expense of his profits. When signing the deal, it might seem tempting to insist on a low price for the service to be received. The provider will agree to this to avoid losing the deal, but will later try to compensate for the price margin through reduced service and expensive extras. Almost every outsourcing enterprise has had experience with this.
It is easier to manage providers if you have clear insight into the costs of malfunctions and the quality of the service as it is experienced by the users. This makes your own business case, as well as the (financial) advantages of improved service from the service provider, much clearer. For example, when the direct and indirect costs of an incident are known, you can also immediately define the win-win situation and use it as incentive towards the service provider.It is easier to manage providers if you have clear insight into the costs of malfunctions and the quality of the service as it is experienced by the users.
Let’s say for argument’s sake that 100,000 incidents occur in your organisation each year and that each of these costs EUR 100 in direct costs alone. Reducing the number of incidents by 20 percent leads to a direct saving of EUR 2 million. If you share this benefit with the provider, it offers him a strong incentive to improve his service quality. Besides a reduction of your own direct costs, you as the client also save on indirect costs (which are often several times higher than the direct costs).
Good cooperation with the outsourcing providers requires more of these types of performance-based agreements. Companies have shown scarcely any initiative to date on the closing of deals in which strong incentives for the provider to excel have been incorporated. In some cases, providers are even paid for every incident they resolve. This offers no single encouragement for improving the level of service. In fact, it sometimes acts as a perverse incentive to not make any improvement at all.
Harmonised preconditions
The classic improvement cycle of ‘Plan-Do-Check-Act’ sees many organisations throwing in the towel after the first two stages. In their case, the final two stages are better described as ‘Hope’ and ‘Forget’. The three steps described in this article ensure the appropriate preconditions for a successful conclusion of the improvement cycle and successful service excellence. These preconditions can reinforce one another: proper insight into the most important metrics and customer satisfaction levels are a condition for making sound performance-based agreements with providers.
When implementing the three steps, it is easier to focus your resources and energy on improving the level of service. The IT organisation has the correct data at hand to support business cases and subsequently make the right decisions. The performance-based agreements with providers do not obstruct good service, but rather encourage the improvement of processes. Insight into both the quality and the satisfaction levels also means that ‘gaps’ in the service surface sooner and can therefore be dealt with sooner. Internally, processes are better defined and continuously tightened. Eventually, employees’ approval will follow in the form of higher satisfaction levels. Then you as an organisation will have acquired the ‘Wow’ factor.