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Figure 7.21 Increasing accessibility through multiple service channels

The following approaches increase the accessibility of services (Figure 7.22):

 Diversity of channels – provide multiple types of access channels so that demand goes through different channels and is safe from a single cause of failure. This is active diverse redundancy, which also provides utility to customers through preferred choices.

 Density of network – add additional service access points, nodes, or terminals of the same type to increase the capacity of the network with density of coverage. This is active homogeneous redundancy, which does not reduce vulnerability to a single cause of failure but reduces the complexity and provides economy of scale.

 Loose coupling – design interfaces based on public infrastructure, open source technologies and ubiquitous access points such as mobile phones and browsers so that the marginal cost of adding a user is low. It enables users to access the service from a wider range of locations and situations and also reduces the overall cost of maintaining a service. Advances in information security make this possible.

Figure 7.22 Channel capacity used for redundancy

7.5.7 Interactions between factors of availability

By balancing availability factors, the same capacity may achieve higher throughput leading to improvements in the overall operationaleffectiveness of the service operation. Controlling the flow of demand patterns can reduce the overall cost of service provision. Pricing and discounts can influence demand patterns. Customers can self-select as business needs justify. Self-service options are generally available at lower charges than staffed options with more expensive resources. In many countries, maintaining idle capacity of staff costs more than providing the equivalent capacity via self-service channels such as websites, kiosks, interactive-voice response units (IVR) and new forms of service robots.

Multiple channels of service increase the level of redundancy, increase the area of contact and distribute the workload across the system. Customers value the convenience provided by a choice of multiple channels. When any one channel suffers outages or degradation in performance, it is possible to maintain the quality of service.

Underlying risks and unintended outcomes driven by feedback loops may influence the Capacity Management approach pursued. Socio-technical systems are complex with many interactions and trade-offs to be considered. The additional service channels increase not only the area of contact with customers but also the exposure to operational risks. Maintaining service levels requires additional continuity and security measures. The opening of new service channels may attract new usage patterns that need support. It is important to examine the interactions between the various factors of service availability (Figure 7.23).

Figure 7.23 Interactions between factors of service availability

Reinforcing and balancing effects are set up according to the feedback principle between factors of availability. The control levers of access, reliability and maintainability, applied in combination, provide the desired level of service availability. Considerations of capacity, cost and risks constrain each type of advantage.

8 Technology and strategy

Herbert A. Simon of Carnegie Mellon University won the 1978 Nobel Prize in economics for his work on decision-making processes within economic organizations. According to Simon’s concept of bounded rationality there are limits to the decision-making capabilities of human agents in formulating and solving complex problems and in processing information. Even the most dedicated, motivated and talented groups and individuals have limited capacity for dealing with the inherent complexity, uncertainty and conflicts or trade-offs in most socio-technical systems.

Services are socio-technical systems with service assets as the operating elements. People and processes act as concentrators of other assets in social and technical subsystems respectively (Figure 8.1). The performance of one sub-system affects the performance of the other in positive and negative ways.

Figure 8.1 Services as socio-technical systems with people and processes as pivots

The interactions between the two subsystems are in the form of dependencies (passive) and influences (active) critical to the performance of service management as a value-creating system. The following are just a few examples of how each of these interactions matter.

 Improvements in design and engineering of activities, tasks and interfaces can compensate for limitations of people.

 Improvements in knowledge, skills, attitudes and experience can partly compensate for poorly designed or inadequate processes, applications and infrastructure.

 Automation of routine processes can reduce variation, allow quick adjustments to process capacity, and relieve stress on service staff during peak demand and off-hours. In some countries, automation can reduce the cost of operations attributable to expensive human resources.

 Productivity tools can make efficient use of human resources. Communications and collaboration tools can increase the effectiveness of knowledge sharing and problem solving.

 Analytical modelling, simulation and visualization tools are useful to analyse the impact of strategies, tactics and operations. They are useful to construct hypotheses, evaluate options and plan scenarios.

The effectiveness of Service Strategy relies on a loosely coupled but balanced and strong relationship between the social and technical subsystems. It is essential to identify and control these dependencies and influences. Reviews in Service design, Service Transition, Service Operation and Continual Service Improvement should include analysis of possible dysfunction or lack of synchronization between the two subsystems.

The design of socio-technical systems is an important consideration in service management. It is important to recognize that services are much more than a series of activities that produce intangible value. They are systems with complex interactions between various factors of production or service assets. The methods and principles of operations research, systems dynamics and statistical process control are very useful within the context of improving the reliability of services.

8.1 Service automation

Automation can have particularly significant impact on the performance of service assets such as management, organization, people, process, knowledge and information. Applications by themselves are a means of automation but their performance can also be improved where they need to be shared between people and process assets. Advances in artificial intelligence, machine learning and rich-media technologies have increased the capabilities of software-based service agents to handle a variety of tasks and interactions.

Automation is considered to improve the utility and warranty of services. It may offer advantages in many areas of opportunity, including the following:

 The capacity of automated resources can be more easily adjusted in response to variations in demand volumes.

 Automated resources can handle capacity with fewer restrictions on time of access; they can therefore be used to serve demand across time zones and during after hours.

 Automated systems present a good basis for measuring and improving service processes by holding constant the factor of human resources. Conversely, they can be used to measure the differential impact on service quality and costs due to varying levels of knowledge, skills and experience of human resources.

 Many optimization problems such as scheduling, routing and allocation of resources require computing power that is beyond the capacity of human agents.

 Automation is a means for capturing the knowledge required for a service process. Codified knowledge is relatively easy to distribute throughout the organization in a consistent and secure manner. It reduces the depreciation of knowledge when employees move within the organization or permanently leave.

When judiciously applied, the automation of service processes helps improve the quality of service, reduce costs and reduce risks by reducing complexity and uncertainty, and by efficiently resolving trade-offs. (This is the concept of Pareto efficiency, where the solution or bargain is efficient when one side of the trade-off cannot be better off without making the other side worse off.)

The following are some of the areas where service management can benefit from automation:

 Design and modelling

 Service catalogue

 Pattern recognition and analysis

 Classification, prioritization and routing

 Detection and monitoring

 Optimization.

Demand for services can be captured from simple interactions customers have with items in an automated Service Catalogue. There is a need to hide the complexity in the relationships between customer outcomes and the service assets that produce them, and present only the information the customers need to specify the utility and warranty needed with respect to any particular outcome. However, customers need choice and flexibility in presenting demand.

It is possible to handle routine service requests with some level of automation. Such requests should be identified, classified and routed to automated units or self-service options. This requires the study of business activity patterns that exist with each customer.

The variation in the performance of individuals with time, workload, motivation and nature of the task at hand can be a disadvantage in many situations. The variation in the knowledge, skills and experience of individuals can lead to variation in the performance of processes. Variations in processing times across service transactions, jobs or cycles can result in degradation of service levels, usually in the form of delays and congestion (Figure 8.2).

Figure 8.2 Degrading effect of variation in service processes

8.1.1 Preparing for automation

Applying automation indiscriminately can create more problems or exacerbate existing ones. The following guidelines should be applied:

Simplify the service processes before automating them. By itself, simplification of processes can reduce variations in performance because there are fewer tasks and interactions for variations to enter. Simplification should not adversely affect the outcome of the process. Removal of necessary information, tasks, or interactions makes the processes simpler but less useful. There are limits to simplification. Begin the analysis for automation at this limit.

Clarify the flow of activities, allocation of tasks, need for information, and interactions. All service agents and users should be clear about what they need to do so that the required inputs for a service transaction are available and complete. Automation itself makes the clarification easier through messaging, interactive terminals and websites. So automate, clarify, test, modify and then automate again.

In self-service situations, reduce the surface area of the contact users have with the underlying systems and processes. Needless interactions with the internals of the system can introduce avoidable variation because of mental overload and slower learning curves. Apply the principles of encapsulation and modularity to simplify the interfaces so that users see the attributes needed to present demand and extract utility.

Do not be in a hurry to automate tasks and interactions that are neither simple nor routine in terms of inputs, resources and outcomes. Recurring patterns are more suited for automation than less consistent and infrequent activities.

8.1.2 Service analytics and instrumentation