|
|
| Home - Industry Article - Oct 04 Issue |
Internal Service Delivery Should Run More Like a Business
continued... page 2 |
Service Delivery with a Profit & Loss Focus
To solve these problems, services delivery executives must begin to run a cross-organizational services team using the same strategies as stand-alone businesses – complete with a profit and loss view. The discipline involved in running services like a business is critical to aligning service delivery with the overall goals of the organization. By following these incremental steps, any multi-faceted services organization can begin to improve efficiency and recover the cost of service delivery.
Step 1: Service Users are “Customers”
Align business needs and service delivery to internal employees using the same techniques practiced by external service teams -- that is, view employees as “customers.” Understanding which employee services are most important to the top and bottom line provides a framework for a balanced, business-level assessment of the “cost vs. quality” trade-offs for each service.
Step 2: Standardize Services in a Catalog
Manufacturers standardize product offerings because this provides a repeatable mechanism for managing costs and maintaining consistent quality. In the same way, services should be standardized and documented in an enterprise-wide “catalog” of all available offerings written in basic business terms. An interactive online “storefront” for standard services gives employees a personalized list of services, options, and configurations best suited for their function, and eliminates much of the clarification required in the ordering process.
Step 3: Implement Service Level Agreements (SLAs)
Lack of communication around when services will be delivered is a common source of employee dissatisfaction with internal service delivery. Service is often perceived as slow since few organizations set realistic expectations, and even fewer provide visibility into the status of a request. Implement SLAs to which your business users agree. This gives the service team and ‘customers’ a common understanding of how long services will take and what is required by all parties. Also, SLAs provide a benchmark against which service delivery teams can measure their efforts.
Step 4: Charge for Services
Most service organizations are allocated a fixed portion of the corporate budget, which limits flexibility in adjusting to changing customer demand. When service organizations “charge-back” for services delivered, they achieve greater flexibility, and the challenge of managing budgets shifts to the user. If the price for the service exceeds the benefit, the employee/customer – not the service team – makes the business decision.
Step 5: Report, Monitor, and Refine
By linking service delivery processes across departments and standardizing them for consistency, every transaction related to ordering and fulfillment can be subsequently logged and tracked. This provides key benchmarking metrics, such as frequency of demand, the time required to complete each task, how many orders were fulfilled successfully, etc. Analyzing these metrics enables an organization to constantly refine operation and deliver the best service level possible.
* * *
It’s time that today’s companies give the same attention to service delivery as they do to supply chain management, customer resource management, and other critical enterprise functions. Service line executives who hesitate to deploy service delivery management solutions are at significant risk of seeing their organizations turned over to outsourcers – as these external service vendors are prepared to apply the discipline required to reduce costs and improve service delivery quality. Organizations that run IT and other internal service delivery teams like a business can achieve greater efficiency, improved employee productivity and considerable cost savings.
1 CIO Insight, February 2004, “IT Spending: Are You Spending Enough?”
As President and CEO of newScale Inc., 17-year industry veteran Scott Hammond has successfully helped newScale customers such as Starbucks, HP, Hitachi Global Storage Technologies, and others recover millions of dollars in profit leakage through improving their service delivery practices. Prior to newScale, Scott was the founder, President and CEO of Digital Market, Inc. (DMI), the leading provider of Web-based sourcing and procurement solutions for direct materials. In November of 1999, DMI merged with Agile Software. Scott can be reached for article feedback at scott.hammond@newscale.com
 
|
|
|
