If You Can Measure It, You Can Manage It

While too many companies measure the wrong thing or measure what can be measured as opposed to what should be measured, measurement is still a required function of running a sustainable organization. Measuring service levels is one area though that includes some complexity.
As services become an ever larger part of the global economy, leaders are rightly looking for ways to improve productivity and efficiency.
Although a company can do many things to control the variance of its service delivery, most of them fall into three main areas: managing demand, standardizing environments, and applying appropriate resources to tasks. Once leaders have learned to measure the service level variance inherent in their organization, they can begin to manage processes to eliminate waste, to improve the delivery of services and to price services more accurately.
Managing demand offers the biggest potential for improvement. It is critical to identify the sources of demand for services—sources that might include faulty products, poorly performing service units, or any number of other causes. Some fixes must be made within the organization (better training, better products, automated-response systems); others depend on influencing the behavior of customers (for instance, by offering tools and guidance to help them resolve problems themselves).
Standardizing operating environments requires the most discipline, since salespeople are strongly tempted to sell as much customization as a client wants. Standardization can yield enormous results. In addition to raising productivity, it helps the workforce, and therefore the organization, become more flexible. Where possible, companies should standardize not only service product lines and tasks but also the work environments of employees and the processes, systems and features they use to deliver services.
Finally, companies that have a better picture of where costs are incurred can price services more accurately to avoid losing revenue on unprofitable activities. They can write better contracts that take into account cost drivers hitherto written off as inescapable variance.
Faced with stiffening competition, increasingly demanding customers, high labour costs, and, in some markets, slowing growth, service businesses around the world are trying to boost their productivity. But whereas manufacturing businesses can raise it by monitoring and reducing waste and variance in their relatively homogeneous production and distribution processes, service businesses find that improving performance is trickier because their customers, activities, and interactions vary too widely.
Services may indeed be more difficult to measure and standardize than the manufacture of products, but leaders should not abandon hope. Having the capability to effectively measure service delivery creates the ability to influence those elements that make a difference.
Measuring and monitoring performance (and its variance) is a fundamental prerequisite for identifying efficiencies and best practices and for spreading them throughout the organization.
Although some variance in services is inescapable, much of what leaders consider unmanageable can be controlled if companies measure and act on the right things……