How to Develop a Long-Term Service Delivery Strategy from Creation to Evaluation

Robert K Martineau

Vice President

Business Strategy & IT Consulting

Today’s Agenda

• 8:30- 9:30 Presentation and Q&A• 9:30- 9:40 Introduction to Problem• 9:40-10:30 Workshop and Coffee• 10:45-11:15 Team Presentations• 11:15-12:00 Panel and Wrap Up

Developing a Long Term Service Delivery Strategy

Presentation

What We’ll Talk About…

• Understanding the Desired Service Outcome

• Understanding the Customer / User

• Designing a New Service or Updating an Existing Service • Determine desired outcome, expected benefits, customer,

requirements• Perform Current Capability Assessment – Customer Interaction, Back

Office Processes, Systems, Supporting Infrastructure• Design the Service, including channel(s)• Determine Integration with Back End Processes and Systems• Determine Support Infrastructure Requirements• Exploit Partnership Opportunities• Develop Performance Management Framework• Develop Strategic Plan and Budget• Develop Implementation Plan

Terminology

Service• Something that you do for someone or on their behalf, such

as performing a task, or providing information or good(s)

Channel• The conduit by which an organization’s service(s) are offered

or distributed to a customer. • A channel is often part of the service feature and part of the

customer value proposition. • The attributes of the channel can enhance or diminish the

service(s) for each segment.• Examples: over the counter, mail, telephone, eMail, Web site

Customer• A person, organization or process that receives and uses a service

1.DESIRED

OUTCOME

2.UNDERSTANDCUSTOMERS

USERSNEEDS & WANTS

3.SERVICE

OBJECTIVES& SERVICE

DESIGN4.

BACK OFFICEPROCESSES

&SYSTEMS

6.SUPPORTING

INFRASTRUCTURE

5.SERVICE

CHANNELS

7.CUSTOMER

SATISFACTION

8.OUTCOME

ATTAINMENT

Begin here, with the

outcome in mindBe

CustomerCentric

Design from the

outside in

LeverageIntegrate

Transform

Multi-ChannelService Delivery

MeasureCustomer

Satisfaction DemonstrateResults

ForCanadians

The Typical Journey…

Step 1 - Developing a Service Delivery Strategy • Achieving the Desired Outcome

Step 1 - Understand Desired Outcome

Understand the Service Delivery Strategic Context

Your Service Outcome

Departmental Outcome

Government Outcome

Your Service

Departmental Service

Government Services

Clearly understand the answers to these questions:

1. What desired outcome is your service to produce? (Not output)

2. What is the objective / purpose of your service? What will be the delivered benefit(s)? Who (groups, segments etc) will benefit?

3. How does your service contribute to the attainment of the Department’s / Government’s desired outcome for Canadians?

4. What do I need to consider in terms of policy and legislation ?

Step 1 - How to Do This…

• Review strategic direction setting documents, especially for desired outcomes and recent performance

Focus on understanding:• Your Organization’s Strategic Objectives• Desired Outcomes and Intended Result(s)• Current Performance Reports and Measures

• Define the desired outcome for your service and the benefit(s) that will be obtained by the customers / users of your service

• Consultation with stakeholders to build buy in, consensus

• Obtain senior management agreement on the desired outcome and benefits statement

This will ensure clarity of purpose and strategic alignment

Best Practice:Understand your organization’s Strategic Plan, Business Plan, RPP, DPR. Connect the dots.

Service Delivery Success• Be Outcome Oriented• Balance Perspectives• Build Consensus• Achieve Strategic

Alignment

Service Delivery Strategy

Step 1 - Balancing Perspectives

Executives, Service Managers

Objectives: Satisfied customers Reduced costs Increased effectiveness

IT CommunityObjectives:

Leading edge technology Cost usually not an issue Superior technical performance Security

Customers and Front Line Staff

Objectives: Simplicity, ease of use Convenience 7/24 access to services Seamless service Privacy

Strategic Factor Description

Desired Outcome

Purpose of Service

Contribution to Organization Outcome

Policy, legislative considerations

Expected Benefit

Senior Management Perspective

Service Manager Perspective

Support Infrastructure Perspective

Customer / Front Line Worker Perspective

Step 1 – Service Delivery StrategySample Analysis

Step 2 - Understanding the Customer / User

Step 2 - Understand your Customer

1. Who are the Current and Potential Customers / Users?

2. What do you know about them and what they want?

• Attributes• Demographics• Geographics• Psychographics

• Segments• Profiles• Preferences

3. How are they served today? Usage statistics, patterns?

4. How do they use what is available today? When? How often?

5. How would they like to be served? How is feedback obtained?

6. What are their service preferences?

Best Practice:Develop a detailed understanding of customers and service users.

Step 2 - Importance of Customer Data

1. Plan to Integrate all Customer Data into a Single DatabaseBenefits• Better customer profiling• Better customer service• Better service management

Considerations• User acceptance• Legislative• Privacy Act and PIPEDA• Confidentiality2. Analyze Usage Data

a. Usage rates vs profilesb. Usage patterns and triggers

3. Consider Predictive Modelinga. Life eventsb. Business eventsc. Trends, patterns

4. Performance Managementa. Transactional - What do they use? How often? Are they satisfied?b. Strategic - Is the desired customer outcome being attained?

But, carefully consider access to and use of this data

BestPractice

Factor Segment 1 Segment 2 Segment 3 Segment 4

Customer Identity or Group

Service

Needs

Service Preferences

Access Method

Channel Preference

Frequency, Duration

Security Privacy Needs

Satisfaction / Feedback

Outcome Attainment

Step 2 - Importance of Customer DataSample Customer Segment Comparison

Step 3 – Designing the Service and Channels3.1 Current Capability Assessment3.2 Designing the Service3.3 Performance Management3.4 Support Infrastructure Requirements3.5 Partnering

Current Service(s) Assessment• What service(s) are we mandated to deliver?• How many service requests do customers make of us?• How many different requests by type do we receive?• When are these requests made? What pattern do the requests form?• How do we handle a customer service request?• How de we deliver / fulfill a service request?• What do we know of customer satisfaction with the current services?• When were our services designed? Last reviewed? Is there a life cycle

management approach used to keep them current?

3.1 Current Capability Assessment

Current Channel(s)• What service delivery channels to we have?• What channels are used by each customer segment to submit requests?• What do we know about cycle times and throughput for each channel?

Other metrics?• What do we know about customer satisfaction regarding our current

channels?

3.1 Current Capability Assessment

Customer Knowledge• How many customers do we have?• Have we segmented / profiled our customers?• What do we know about them?• How do we know it?• How do we know that it is valid?• Is access to customer information managed to protect privacy and

confidentiality?

Current Business Processes• How are customer service requests handled? At the customer

interface? Internally? At the delivery interface?• When was the current business process designed? Updated?• Are the customer facing channels and business processes

integrated with the back office business processes and systems? If not, how are hand offs handled?

• What automation support enables customer facing and internal business processes?

Current Information Capture• What information do we collect by type, volume?

• Transactions?• Customers? Individually? By segments?

• What capabilities do we have to analyze this information?• What reporting capability to we have?

Current Technology / ies• What applications support current customer facing and back office

business processes?• What technologies do we use in each channel?

• Store front, Telephone / call centre / voice, Mail in, eMail, Kiosk / ATM, Web Site

Current Performance Management or Evaluation• How is the performance of current service delivery managed and / or

evaluated?• Are the measures comprehensive? Process? Output? Outcome?

Financial? Non-financial?

3.1 Current Capability Assessment

Factor Capability Assessment

Current Services Assessment

Current Channel(s)

Current Business Processes

Customer Knowledge

Information Capture

Supporting Technology Infrastructure

Performance Management Approach

3.1 Current Capability AssessmentSample Analysis

3.2 Designing the Service

Determine The High Level Service Parameters:

• Achieve Targeted Business Outcome – What It Has To Do• Attain Desired Service Outcome, with Attainment Measured• Meet Customer Satisfaction and Service Quality• Meet Service Levels / Objectives• Match Channel and access capability to customer profile(s)• Deliver Consistent Service and Message

• Meet Legislative, Policy Requirements - Compliance• Satisfy Privacy, Access To Information, CLF, Usability, etc.

• Respect Budgetary / Cost Limitations - What Is Affordable• Design to Budget• Where possible, attract / drive people to lower cost channel(s) to decrease

service delivery cost and increase service levels and quality

Government

Department

Service

DesiredOutcome

Customer/ Segment

Profile

Service

3.3 Determine Supporting Infrastructure Requirements

Funding

CustomerRequirements

Back OfficeProcesses& Systems

Policy, Legislation

SchedulingConstraints

Channel

ChannelCustomer

CurrentCapability

Assessment

3.2 Design the Service

Step 1Step 1

Step 2Step 2Step 3.1

3.2 Service Design Considerations

Also consider

ConsiderPreviousSteps

and

3.2 Designing the Service

1. Analyze2. Design

3. Plan4. Deploy

5. Operate6. Monitor / Adjust

ServiceDesign

ProjectManagement

PerformanceManagement

Concurrent

Typical Project Approach

BEST PRACTICE:As you design the service, determine the performance management approach – the outcome measures, the customer satisfaction metrics, the process and transaction metrics, the supporting infrastructure metrics, the financial metrics.

3.2 Service Design

Customer

Outcome

Channel

Channel

Channel

Channel

Service

Back OfficeProcesses

&Systems

Supporting Infrastructure

BEST PRACTICE:1. Engage the customer / user in service / channel design and usability testing2. Engage process owners and key infrastructure people (such as CIO (IT), CFO (financial

management and cost accounting) in service and channel design

1. Start with Customer Needs and Wants3. Determine

how you will satisfy that need

A Typical Approach…

2. Determine how customer conveys needs

4. Determine what you need from other parts of your organization

5. Determine how you assemble / package the response 6. Determine how you would convey

the deliverable to the customer

7. Determine customer satisfaction

3.2 Why Multiple Channels?

1. Experience has shown that there is a direct correlation between multi-channel delivery and perceptions of higher value – “they care about me”

2. Experience has shown that many people get basic information in one channel (web, mail) and want personal interaction to clarify questions and refine choices (using the telephone or over the counter / in person)

3. You are better able to map and tune channels to individual / segment customer needs and preferences

4. You are better able to deal with privacy / trust concerns – convert initial reluctance to confident user

5. People value choice – ability to select channel based on lifestyle, needs, schedule, convenience

3.2 Typical Channel Attributes

Channels will vary in:• Ease / difficulty of access• Quantity and quality of

information / content• Richness of client experience• Reach – geographic,

demographic • Typical customer profile and

likelihood of use• Level of security, privacy and

confidentiality• Operating cost• Availability• Speed of service • Customer satisfaction

Channel attributes drive channel use:

• Ability to complete service transaction

• User preference

• User aptitude

• Ease of access

• Convenience

• Speed of service

• Efficiency

• Trust

CustomerCHANNELS

3.2 Using Multiple Channels

INTERNET

Direct / Over The Counter

Mail

Telephone

InternetWeb, eMail

Telephone

Kiosk DataNetwork

BackOfficeIndirect

Web, eMail

CustomerFacing

Best Practice:Connect all channels to common back end system

3.2 What’s Different about Various Channels?

Channel Strengths Richness Reach Information Provision

Information Capture

Cost *(Bank)

Store Front Face-to-face, unstructured, comfortable

Variable Low Variable – depends on skill, resources

Often lost unless

automated

High

($3.00)

Mail Comfortable, flexible, ease of use

High Medium Rich (potential) Often lost Medium

Telephone Personal, simple, universal access

Good for unstructured and ill informed questions

Medium High Limited to voice transfer

Often limited or lost unless automated

Medium

($1.50)

IVR Cheap, universal access

Good for repetitive transactions

Low High Rich for predetermined

questions / situations

Digitized but limited

Medium

($0.30)

Kiosk / ATM Ease of use and access Low Low Rich for predetermined

questions / situations

Digitized but limited

Lower

($0.78 to

$0.42)

Web Low transaction cost

Flexible

High Medium Richest High - Forms and cookies

Lowest

($0.06)

* Booz Allen Hamilton Study of Banking Industry, 1999, adjusted to 2002 Australian costs

Service Design Factor Specifications

1. Service Outcome and Objectives

2. Policy, Legislation Drivers

3. Customer Requirements

4. Customer Segments and Profiles

5. Customer Engagement in Design Process

6. Multi-disciplinary Design Team (Biz, HR, IT, $)

7. Current Capability Assessment

8. Service Design (Business Process)

9. Customer Experience Design

10. Channel Selection and Design

11. Channel Integration with Common Applications

12. Service Integration with Back Office Systems

13. Partnership Opportunities

14. Performance Management Approach

3.2 Service Design Summary

Based on What You Have Determined Here…

Design the customer experience, process(es), channels, integration, partnership,performance management

Sample Service Specifications

Aspect Objective Measure Indicator

&

Metric

Target

Or

Standard

Service Outcome Desired Service Outcome

Policy Objective(s) Achieved

Financial Affordable, Within Budget

Charges

Expenses

Customer Customer Satisfaction

Satisfaction

Complaints

Kudos

Process Efficient, Integrated Processes

Throughput speed

Cycle Time

Enablers Supporting Infrastructure

Availability

Capacity

3.3 Performance Management Framework

Best Practice: Based on Kaplan Norton “Balanced Scorecard”

3.4 Support Infrastructure Requirements

Aspect Channel 1

Over the Counter

Channel 2

Mail

Channel 3

Telephone

Channel 4

Web

Customer Interface

In person Customer Service staff (processing mail)

Call Center

(processing calls)

Web Site

IT Tools Terminal Terminal Terminal Web Site

Web Application

Application Common service request / delivery application

Common customer database, Interface with corporate applications

Network Common Data Network (Internal) and Internet (External)

Telephone Network – Internal; and PSTN

Security User log on

Managed access to applications and database

User log on

Managed access to applications and database

User log on

Managed access to applications and database

Firewall

SSL / PKI

Managed access to applications and database

Privacy Managed access to applications and database

Managed access to applications and database

Managed access to applications and database

Managed access Non-repudiation

3.4 Privacy and Security Considerations

Privacy• Privacy policy (published) and employees trained• Privacy Impact Assessment (PIA) on applications• Security mechanisms to enable privacy

Security• Security Policy, Statements of Sensitivity• Threat and Risk Assessment (TRA)• Vulnerability Assessment, Penetration Testing• Identity Management for Credentials• Role Based Access Management (Permissions)• Security Mechanisms – Firewalls, PKI, SSL, Smart Cards

for integrity and non-repudiation

Business Continuity / Disaster Recovery Planning• Develop and practice the plan

BestPractice

BestPractice

BestPractice

3.4 Trends and Future Considerations

Technologies and Trends to Watch:• Web Services

• Ability to link applications and databases

• Identity Management• Access management tool• Confirming credentials

• Privacy• Protection of personal information and

how it is used

• Personalization• For improved service• For personalized content

Hint:Panel members well qualified to speak to these.

3.5 Partnering in Service Delivery

• Determine what you must do / keep “in house” for strategic / legislated reasons

• Determine what you could consider for alternative arrangements:• Outsourcing – services and / or business processes• Partnering – from peer organizations, adjacencies, communities of

interest

Be Flexible in Your Approach to Service Design: Evaluate alternative opportunities for services and / or service components:

Partnering is a useful strategy for:

• Reduction in duplicate capabilities in similar services

• Burden sharing of facilities, skilled people and resources

• Cost avoidance and achieving economies of scale

3.5 Partnering in Service Delivery

Some Partnering Examples• Shared web site infrastructure• On Line Payment capability• Shared Call Center• Shared Kiosks

Establish a Partnership Agreement That Features:

• Clarity - The objective of the partnership

• Specifics - Describe what would be shared among partners

• Understandable, workable agreement - Develop a clear partnership agreement that describes the partnership accountabilities, responsibilities and liabilities for operations, management, reporting, financial contribution management

• Effective management tools - Describe governance, management responsibilities, contributions and accountabilities, conflict / issue resolution process(es)

A Strategic Approach to Client Centric Service Delivery

Step 4 - High Level Strategic Plan – An Outline

1. Strategy• Service Strategic Outcome• Customer Segments, Profiles• Service Objectives

2. Capability Assessment

3. Design Service• Define Service Process• Identify New Requirements• Design Performance

Management Framework• Identify Support

Infrastructure Needs• Perform Gap Analysis• Identify Partnering

Opportunities• Develop Service Budget

4. Detailed Planning• Service Management Plan• Implementation (Project) Plan• Test Plan• Change Management Plan• Training Plan

5. Implementation

6. Operations

7. Management Review• Monthly Performance Review• Quarterly Performance Review• Annual Performance Review• Annual Service Evaluation

Step 4 - Outline Strategic Plan

Workshop

Team Presentations

Table Group Teams

Panel

Panel Members and Areas of Expertise

• Robert K. Martineau• Catherine Allan• Hugh Lindley• Microsoft• Entrust

Wrap Up

• Understand the service delivery vision and desired outcome• Know where you want to be and the intended outcome

• Understand existing business strategy, desired outcomes, business processes, supporting infrastructure before moving forward• Know where you are

• Design / Re-engineer from the customer/user perspective• Redesign to maximize quality of customer experience and value

• Take a holistic, not a piecemeal approach• Don’t consider service implementations in isolation, but rather

together as a strategic direction and exploit synergies

• Evaluation of the technology in detail is crucial in determining the best fit for you• Select technology for business value• Don’t force fit business strategy to the wrong technology

There is a right way to do it !

Thank you.Robert K. Martineau

Vice President

Business Strategy & IT Consulting, Qunara Inc.

613-237-0257

robert.martineau@qunara.com