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Enhancing performance in service operations management

An article by Neil Bentley and Richard Jeffery

Most service providers are operating under intense competitive pressure. Once business has been won, the key to profitability is to keep the business through consistently meeting quality and service standards whilst maintaining margins.

This means at least controlling costs and often continuously reducing them in the face of price-based competition. Staff productivity is a prime driver of costs. Thus, control of productivity is of strategic importance in most service environments.

The task - effective practices

But control of productivity in service environments is notoriously difficult to achieve. In our experience this is because organisations have difficulty in consistently applying effective practices.

These practices include:

		Adopting a style of actively managing to anticipate and solve problems in advance, rather tnan simply reacting or resorting to bureaucratic rules of behaviour.
		Designing the management process to forecast work and resources, make realistic plans, carry out the work and, most importantly, review actual outcomes against plans, thereby closing the loop for the cycle to begin again.
		Ensuring that managers have operations management skills in addition to people and technical skills - too often managers have been promoted solely on the basis of their technical skills.
		Providing resources for managers, such as planning standards and management information systems.

Our approach

AOM has developed a comprehensive approach for establishing an enduring framework within which operations can be managed to tight and stretching productivity targets whilst maintaining or exceeding service and quality targets.

Our approach is centred on changing the practices of Front Line Managers, giving them the necessary operations management skills and providing them with forecasting, planning and control support tools to allow immediate application of their learning. Managers are given the processes and confidence to share work and resource across teams.

This 'bottom-up' approach builds office-wide planning and control processes that provide credibility and support to allow stretching productivity targets to be set whilst enhancing the ability to meet customer service and quality targets.

There are three elements to this approach:

		An intensive simulation-based training course which firmly establishes the principles of operations management for front-line and operations managers.
		An easy-to-use software package (WorkwareTM) and associated tools which support the closed-loop planning and control process and include unique features to ensure credibility and flexibility in the planning process.
		In-depth consulting skills to support implementation at all levels of the organisation.

Application

Our approach has been developed in a wide variety of service environments. Examples are:

		Operational departments of insurance companies including sales, new business, claims handling, underwriting and support processes.
		Commercial banking payments and custodial functions.
		Transaction processing in central government including tax assessment and collection, benefits assessment and payment.

The approach has also been demonstrated as applicable in:

		Software development and applications support.
		Service environments which include equipment scheduling.
		Service environments where work is processed in sequential teams.

The approach handles a variety of worktypes, with variability of methods and work content with these worktypes. It also forms strategies for handling customer contact via post, phone and face-to-face in back office and customer service environments.

Results

In the sites where we have worked, operations have been rapidly brought under control. Within three months productivity gains of at least 10% and usually nearer 25% have been achieved. At the same time quality and timeliness has been maintained or radically improved. In addition we have equipped our clients with the skills to structure large-scale roll-out programmes and staff them with their own resources.