Strategic service management

Strategic Service Management

Strategic Service Management, SSM, is a new customer commitment-centric business strategy that optimizes a company’s service business processes through a single, integrated view of post-sale service operations, by taking into consideration the planning and forecasting of service resources, and the strategy and management of customer commitments, service partners, and service pricing.

Reason for Strategic Service Management¹

Products have become commoditized and product-based profit margins have decreased over time therefore companies are looking for new sources of revenue
Companies are looking to differentiate themselves from the competition and a best in class service organization can definitely lead to customer loyalty
Customers are expecting faster resolution time when they place a service call
Asset management responsibility and accountability are shifting from the enduser

enterprise to OEMs and their service provider partners

Cost cuts require higher worker productivity

Best Practices²

Bring field service management and parts logistics under one operational umbrella;
Leverage existing and new technology solutions to synchronize four service pillars;
Address process deficiencies before deploying technology;
Define requirements and success criteria clearly before evaluating technology solutions;
Leverage partnerships with service and logistics providers;
Attack aftermarket service as a top-line business opportunity;
Involve stakeholders early and often in transformational process;
Adopt a two-pronged approach to measuring the efficacy of after-market service:operational and strategic;
Adopt an enterprise-wide perspective; and
Invest more energy in forecasting and planning technician capacity and work order

demand.

Results from Strategic Service Management deployments³

Avaya reduced Service parts inventory from $250 million to $160 million
Sun Microsystems saved $40 million in the first year
Dell grew service revenues over 20% in one year

Footnotes

1.AberdeenGroup’s Industry Traction of Strategic Service Management (http://www.aberdeen.com/summary/report/benchmark/RA_IndustryTraction_MV_2498.asp), December 2005

2. AberdeenGroup’s Best Practices in Strategic Service Management Report (http://www.aberdeen.com/summary/report/benchmark/RA_PSSRpt_MV.asp) , June 2005

3. Yes Ma’am That Part Is In Stock, BusinessWeek, August 1, 2005