Developing an IT Service StrategyPart 2: Dealing With Variability

Jerry BishopBlog.TheHigherEdCIO.com

Creative Commons Attribution-ShareAlike 3.0 Unported License.

ACKNOWLEDGEMENTS & REFERENCESThis presentation was inspired by the work of Frances X. Frei, Professor Harvard Business School who has written extensively and very insightfully on managing service businesses.Breaking the Trade-Off Between Efficiency Versus Service, HBR Nov 06

PART 1 RECAP SERVICE VARIABILITY5 categories of customer introduced variabilityDeveloping an IT Service Strategy Part 1

ARRIVAL VARIABILITYCustomers do not want service at the same times which is not always convenient for the company.

REQUEST VARIABILITYCustomers’ wants and needs are not the same.

CAPABILITY VARIABILITYSome customers are more capable of assisting in the service while others require hand-holding.

EFFORT VARIABILITYWhen customers must perform a role in a service interaction, it’s up to them how much effort they apply to the task.

SUBJECTIVE PREFERENCE VARIABILITYCustomers’ opinions vary widely on what it means to get good service.

PART 2: DEALING WITH VARIABILITYDealing with variability will follow on blog.thehigheredcio.com and be posted to slideshare.net

THE CHALLENGEThe challenge for service managers is how and how much to reduce or accommodate customer introduced variability in their service model

Balancing Service with Efficiency• Services must support

– Consistent and repeatable results

– Achieving a clear value (cost – quality) target

– Capable (How) of handling variability

• Efficiency must provide– Boundaries to maintain

the value target– Capacity (How Much) to

handle variability

Reality for Services Business

• Customers introduce tremendous variability• You cannot drive out all variability since it is

how many customers judge value and quality• Since customers are directly involved you can’t

eliminate all variability even if you wanted to

Conventional Wisdom

• Variability = Cost• Faulty Conclusion

– Accommodate customers various desires or reduce variability and risk customer satisfaction and defection

Frie’s Alternative Perspective

Source: Harvard Business Review • Nov ‘06

Reduction vs. Accommodation

• Look for low cost options to accommodate more variability

• Find ways to reduce variability without compromising the experience

5 Reduction Strategies for IT

• Develop Service Catalogues (menus) to define the standard IT services, options, and tiered support

• Create transparency for IT Service costing• “Show-back”, chargeback, allocation or metering

• Reduce user rights on desktop in exchange for improved quality of experience and more options

• Create incentives for users to complete training• Target users based on demand data from Problem

Management

5 Accommodation Strategies for IT

• Incorporate power users in your service delivery model for broader support options

• Leverage automation strategically for a lower cost high touch staffing model

• Selectively use self service where it will be perceived as a flexible or faster value-add

• Use lower cost labor to expand capabilities including student workers

• Use strategic sourcing solutions to increase capability or support coverage

Which Strategy to Pursue

• Organizations low end of competitive landscape must rely on strategies to reduce variability

• Organizations under financial pressures must rely on reduction strategies

• Markets which can support premium prices can rely more on accommodation strategies

QUESTIONSJerry Bishopblog.thehigheredcio.com