Steve Downton, Downton Service Management Consultants Ltd, Noventum Group
Measuring performance is all well and good, but controlling performance and managing customers through accurate information is the best stance for successful service and business management. In this article Steve Downton discusses how many service operations are struggling to obtain data about their operation to measure success against Service Level Agreements (SLAs), let alone manage their operation by the use of accurate and timely information.
A recent benchmark study identified the information required by a group of service directors to manage their businesses. These service directors are not unique in their struggle to capture detailed information to advantage their position, and in wanting to know the key information necessary to run a sHowever, the problem is usually beyond the SLAs and focuses on satisfying the Board at the monthly review which will usually consist of running through the performance of the operation. The Key Performance Indicators (KPIs) are probably in excess of 100 different measures that are painstakingly gathered each period - though in the interests of time management, the Board will probably only review the top ten measures which, in their opinion, provide the facts (the business quickly learns how to make these look good). The focus of the Board will probably be productivity and margin, beyond these the customer will only be considered if the MD has recently received a complaint. It is also unlikely for the Board to accept a change to the metrics without considerable discussion, as measures are normally compared with historic results to indicate performance change (better or worse).
The first actions needed to improve the situation are to establish fair SLAs; to determine what information should be captured by the operation for presentation to the Board to indicate performance; and to decide an appropriate number of KPIs (usually considered to be less than 50).
The next desired action is to determine the relevant data that would provide information on the efficiency and effectiveness of processes in place, which in turn provide insight into the drivers of the operation. For example, a process for providing parts into the field and of organising part returns will factor in time to pick or source and deploy the parts, and should also be able to capture the location of parts deployed, dead on arrivals, or wrong part in box, parts returned, parts used etc.. Parts demand and parts usage can identify parts availability and be relevant information for the engineer scheduling system. In many instances the timing (not available before 10am) of parts deployed to the engineer is not compatible with the engineer’s early morning requirements to be on route. As a result the engineer may be delayed at the deployment point, resulting in traffic problems, frustration, delays and unnecessary
This leads us into those measures providing information on drivers of the business. A key driver of the business is the need to increase product reliability in the field gathering information on the way the customer uses the equipment and individual specific requirements to improve the use of the equipment and the maximum value to be gained. This information is extremely useful, and extends well beyond data pertaining to simply fixing the equipment, and instead include fixing the customer. In the environment of fixed priced contracts and SLAs, the key driver which needs measuring is the Mean Time Between Failure (MTBF). This KPI has become very important: in a contractual scenario, reducing the MTBF saves money, whereas in the old scenario of “Time and Materials”, reducing the MTBF would reduce the number of visits and therefore reduce revenue. Time and costs saved because of the training or recommendations given by the field/support engineer and then taken up by the customer might be rarely acknowledged by the supplier, but always remembered by the customer, even if not acknowledged at the time. The supplier usually fails to see the value, because the two measures (time spent on prevention versus reduced customer-created faults) would normally not be cross-related, but increasing the reliability of equipment in the field improves the margin of the service operation by reducing visits.
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