What is ...?

Service Management: What and How?

As part of the series of What is-articles, this article is about Service Management.

What is Service Management?

My definition of Service Management is as follows.
Service Management is
making certain that the correct measures are taken to,
considering available means,
ensure the highest possible service level
and that those measures remain effective.

In practice, this means, in any case, making certain that ...

Service provision leads to achieving the purposed goals;
Services are provided correctly;
Disturbances in service provision are suppressed and counteracted adequately and effectively;
Service costs are not needlessly high (maximum return on investment);
Effective measures are taken to deal with consequences of calamities;
The service organisation is prepared to accommodate and support future (organisational) developments.

Each of these practices is touched upon next.

Achieving Goals

To achieve intended goals, it is essential to …:

… know which goals are intended;

… formulate the intended goals clearly and unequivocally;

… enter into suitable, reliable agreements between service provider and service recipient.

Intended goals: Within organisations, one can sense a need of support or other services, without knowing exactly which specific organisational goals should be achieved with such services. In such cases, the sensed need is often personal, aimed at taking away organisation members’ uncertainty and insecurity.

Formulating goals: Without having (clearly) defined what the effects of service provision must be, it is impossible to provide services effectively, or efficiently. In addition, when demands or offerings are formulated differently than they were actually meant, there will almost certainly be dissatisfaction between service provider and service recipient.

Suitable, reliable agreements: Someone who buys certain goods usually does not expect to receive more than agreed upon for the price paid. Oddly, service recipients often do expect to receive more than agreed upon, and sometimes even expect to receive limitless services. They expect maximum service provision, or at least optimal service provision. Maximum service provision is hardly ever possible and optimal service provision tends to be too subjective to enable making objective agreements. Service level agreements must meet SMART-criteria (George T. Doran, 1981), meaning that they must be:

Specific: Which services must be provided where, when, by whom, how, how long, how often, under which conditions?

Measurable: How can be verified whether the agreements are met?

Acceptable: Do the agreements meet legal and common standards? Are the interests of both provider and recipient sufficiently served? (Are price, conditions and service level balanced?)

Realistic: Can the agreed upon service be provided, or is there a risk that agreements cannot be (fully) met?

Time related: Within what time frame must the services be delivered, when does this period commence and what exceptions exist? (See also above, next to Specific).

2. Proper service provision

When are services provided properly?

Providers and recipients may give different answers to this question. In some cases, service recipients may feel that service provision has been inadequate, while service providers feel to have gone beyond what their clients are entitled to. This is the core of many issues:
Recipients often expect to receive more than the provided services.
Several important causes for this are:

The service recipient does not relate the service provision to existing agreements and expects more than is agreed upon with the service provider;
The service level agreement between recipient and provider is unclear;
The recipients know or understand too little about the service level agreement, as a result of which they expect to receive more than is agreed upon;
The provider knows or understands too little about the service level agreement, as a result of which he provides less than is agreed upon;
Both parties are well aware of the content and consequences of the existing the service level agreement, but one or both parties are discontent about this agreement, either causing providers to fail to observe the agreement fully, or causing the recipient to remain dissatisfied despite the agreement being fully met.

The answer to the question ‘When are services provided properly?’ is: ‘When the service provider fully meets the service level agreement’. However, from what has been mentioned above, one can infer that meeting agreements does not guarantee satisfied customers. To achieve that, in certain cases, more is required, such as:

Give more publicity to the content, limitations and consequences of existing agreements (Expectation Management);
Build in adequate checks and balances on compliance with existing agreements (Logging & Monitoring);
Renegotiate service level agreements (SLA Revision).

3. Suppressing disruption

Services can be disrupted or disturbed by various causes, for example:

The client hampers service provision, or facilitates it insufficiently. For instance: the service recipient does not grant the service provider access to locations where services must be provided, or to equipment which must be serviced; the service recipient does not give the service provider all the information relevant to providing the services; the service recipient insufficiently cooperates in taking measures to reduce or eliminate service disruption.

The service provider has not taken appropriate measures to provide the services, as agreed upon; there are inadequacies in the service provider’s organisation or in the way the services are provided to a degree that promotes or causes service disruptions.

Prevention is better than cure. All those involved have their own tasks, responsibilities and authorities. It is important that service recipients and providers appropriately gear those tasks, responsibilities and authorities to one another, and communicate those clearly, timely and often enough to all stakeholders.

By making the right agreements beforehand, much friction afterwards may be prevented. Those agreements could include, for instance, the conditions the recipients must meet to remain eligible for service provision. Similar clauses can be added for service providers in case they do not (timely) meet their agreements. This could be linked to penalty clauses or to publicising service providers’ failures.

4. Cost control

It is in the interest of both service recipients (clients) and service providers that the price of service provision is not needlessly high.

For service recipients it is important that the amount for which they are billed is proportionate to the actual costs of the pertaining service provision. If, for example, a disproportionate percentage of that amount is profit to the service provider, the service recipient may well question whether he receives enough value for money.

It is also important for service recipients that the service costs do not exceed the pertaining service’s return on investment. Services can be cost inefficient because of their limited benefit, or because better alternatives exist.

For service providers, it is important that their revenues sufficiently exceed their costs. Even though that may seem obvious, it appears that, in practice, risks are high that this condition is not met. Especially when service providers face strong competition, their desire to get new commissions may be so strong that it leads them to agree upon irresponsibly low prices that may endanger their business’ viability.

5. Contingency Planning

Always something can go wrong. Some mishaps are more predictable than others are. Certain events can be prevented; others cannot be prevented (at acceptable costs). When things really go wrong, appropriate contingency planning makes the difference between desperately reaching for the skies and effectively rolling up ones sleeves.

Appropriate contingency planning demands making effective preparations to deal with consequences of calamities.

With regard to Service Management, contingency planning is hardly ever a responsibility of service providers alone. Service recipients must share in this responsibility.

Some basic questions to be answered with regard to contingency planning are:

What could go wrong?

(How) can we counter this?

What would such counter measures cost (us) and to what degree will this cover us against existing risks?

Is it more prudent to try to prevent certain calamities, or is it better to focus on dealing with the consequences of calamities when they occur, or should we do both?

Answering the latter question can be based on cost-benefit analysis. Such an answer has an expiration date, since circumstances are subject to change, leading to different outcomes of certain cost-benefit analyses. Furthermore, such cost-benefit analyses can be quite personal in nature, since different people may value both costs and benefit differently.

6. Sustainability

Time and tide wait for no man. Organisations change, markets change and needs change. A service level agreed upon today can – so to speak – be inadequate or superfluous tomorrow.

Service recipients do not like to be tied to contracts with service providers for services they no longer require.

Service providers prefer to not be committed to contracts for services that they no longer wish to provide, for instance because they want to steer their company into a different direction. Nor do they wish to be committed to contracts for services that they are no longer able to provide because, over time, the subject matter has become too complex or because providing the services has become too labour intensive.

To promote sustainability, both providers and recipients can prevent ‘growing apart’, for instance by taking the following precautionary measures:

Make flexible agreements to prevent parties from becoming slaves to their own agreements;

Curb the service provider’s workload, for instance by maximising the number of daily or periodical service requests;

Appropriate, timely information exchange between parties, for instance over intended goal or strategy change by either service provider or service recipient;

Timely and relevantly schooling, advance training and refreshing knowledge and skills of all pertaining organisation members to continue to meet changing knowledge and competence requirements.

Dr. René Van Someren’s personal website is: www.rene.vansomeren.org