Ordering IT Services: Would you like CHIPS with that?

When ordering IT Services, most managers believe that they will get what they paid for. This is sadly and simply very wrong. You always get CHIPS with an order of IT Services.  I will explain the CHIPS acronym later, but first the reason for this blog. To restate the principle that IT services are very different from IT products.  The second reason for this blog is to provide some guidance to both customers and providers of IT services on how to deal with CHIPS.

Why do managers believe they will get what they paid for? Well, it’s normal to believe that you get what you pay for. This is the generic first rule of business. But when it comes to IT services, most customers simply get the price of the IT services. As Warren Buffett states, ‘Price is what you pay. Value is what you get’. And you only get value from IT services if you invest in earning it. The IT Services axiom is ‘you get what you inspect not what you expect’ (W.E. Deming). So without a requisite investment in the inspection of IT services you will simply get the price for the IT service. In addition to getting this price for the IT services, customers invariably do not understand that they get CHIPS and providers rarely advertise that CHIPS come with all orders for service. The difference between what was thought and what was bought.

What are the CHIPS you get when you order IT services? The acronym I put together from the unique characteristics of services described by Lovelock, Patterson and Walker, in their text, Services Marketing (2004). (A must read for anyone working in the Services industry.) The acronym comes from:

C = customer involvement in both the production and consumption of the service

H = heterogeneity of service quality

I = intangibility of the service

P = perishability of output

S = simultaneity of production and consumption

If CHIPS come with all service orders, what should customers and providers do?

Customer CHIPS:

Customers must do the following;

• C - understand clearly their involvement and the rules surrounding such involvement. Customers consuming the service must be aware of, amongst other things, the service level agreement, how to order the service (e.g., Service Desk phone number, hours of coverage, SLAs, Service Catalogue). The ‘challenge of service management is to ensure that customers understand the script and their roles and are happy to be involved’ (p.17, Lovelock, et al, 2004). The happiness of customers with their role in the production and consumption of IT services is a major area of deficit for IT. Typically, this happiness stops with the IT vendor management or commercial staff involved in the contract negotiation. Worse still, the customer’s happiness to be involved in the production and consumption of IT services is not even considered!
• H – clearly appreciate that the results will vary, more importantly own the mechanism for responsive redress, dealing with exceptions and poor service. Invest in the inspection of quality. Augment all physical delivery channels with electronic ones (e.g., e-mail, SMS status updates)
• I - use publications to make visible the performance of service delivery (performance and customer satisfaction reports, best service example of the month, best customer feedback, etc). Reduce the customer risk perception.
• P – ensure that Service Agreements are aligned to business value and not simply IT-centric metrics. Making IT services and their concomitant support relevant to the customer is inversely correlated to perishability. If your customers believe that the IT service is useless, then it has perished.
• S – ensure that you have reviewed the providers’ scripts for the urgency (importance of time) and importance (e.g., VIPs). By doing this, your customers will be delighted with the production and consumption of the IT service.  

Provider CHIPS:

IT service providers must do the following;

• C – ensure their scripts and procedures validate and align with the customer requirements. For example, do not ask a customer what division they work in if it does not help solve their IT issue. If this information is needed for billing purposes then source it via another mechanism. Remember, customer time is precious. So every task must be designed to minimise the customer time, whilst maximising the resolution potential. For example, do not make your customers endure an IVR of more than three levels.
• H – ensure viable procedures exist for exceptions and critical incidents. Own these on behalf of your customer.  Flag to your customer all aspects of the service which increase the risk of heterogeneity. Put in place Service Enhancement Plans to bullet-proof your service delivery.
• I – visit customers and teams who are high consumers of your service and inform them of the performance (reports, best service example of the month, best customer feedback, etc) and solicit from them areas for improvement.
• P – ensure you have invested in mechanisms for smoothing demand levels. As there are no inventories for services, ensuring demand matches your capacity is a critical success factor for customer satisfaction.
• S – ensure that the service delivery system is aligned with customer expectations. Ensure that your service delivery system satisfies the five E’s: easy to use (i.e., you do not need further training to start), enjoyable (make it fun), extensive (it must ask all the right questions, no second bites once complete), efficient (use fields rather than open text, pre-populate fields, keep it to one page), and finally it must be effective (a one-stop shop, avoid bouncing the customer from one staff member to another).

For more information, contact Ernie Zibert at ernie.zibert@gmail.com

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