The first generation of MS deals were awarded before the era of consumption of vast amounts of data by ‘smart phones’. It was a simpler world of voice, text and the promise of video calls. Network providers were searching for the ‘drivers’ to support investment in new network technologies. In many cases Operator CTOs were compliant in ‘buying into’ the drivers. Mostly capacity did not become a major issue. The networks were in a pretty stable state and the focus of the Managed Services was ‘cost’. The risk factors were perceived to be adequate to drive companies like Ericsson, NSN, Huawei etc. to maintain adequate network performance at much lower cost.

The iPhone was born and all that changed. Suddenly mobile networks needed to support vast amounts of data. This data drives real capacity requirements in the network. Any operator CEO will tell you that growth in capacity and growth in revenue are by no means directly aligned. Customer experience on smart phones suddenly become a major point of tension in Managed Services contracts. Assumed baselines of capacity and performance no longer applied. Negative customer experiences were occurring as a result of insufficient network capacity. MS providers did not always have the network intelligence to understand how use of smartphones was impacting network behaviour – the case for investment to improve networks was neither well-made or well understood. In short, strategic decision making between the service provider and operator were not easily made. There appears to have been little focus on how service providers would align priorities to operator objectives and customer experiences. When the data consumption volcano erupted the mechanisms and processes simply weren’t there to support effective decision making between operator and service provider to meet objectives.

MS Teams who are winning deals in 2012 recognise that High Capability Governance is required to support the type of complex decision making required to consistently align provider priorities to operator expectations. These things are not static – they cannot be fixed in the contract and the SLA from day one. Plan for change – implement process to support change. Good decisions and good relationships are founded on good governance processes where all the relevant information is collected and analysed – systematically, consistently and efficiently. We work with great operators and great MS providers who recognise that governance will be one of their key differentiators in 2012 – as they talk about how they will align process and executive reporting to real customer experience and operator financial objectives it makes me very excited. For those who embrace governance mass data consumption in mobile networks represents an opportunity to drive better relationships and real revenue – those who don’t are already falling by the way side. You know who you are.

Service Delivery Teams must continuously strike a delicate balance between meeting customer expectations and meeting their own organizations contribution margin expectations.

• Does the governance capability of the service provider impact the contribution margin and in what ways?
• Do high capability governance teams see better results in customer impact and financial leverage than lower capability teams?
• How does governance capability return the investment required?
• What does governance capability do to contribution margin?
• What is the customer impact of low governance capability?
• How is high capability governance enabled?

Please join ServiceFrame for this Service Provider focused webinar on August 25th. We will examine these questions and seek to understand if increasing contribution margin and customer impact can be delivered through high capability relationship governance.

We will include some open questions and answer sessions during the webinar and would love to get feedback on the topic.

If you have passion on this subject and would be interested in participating in the Webinar please let us know we would be very happy to have additional participants.

• High Customer Impact
• High Financial Leverage
• Growth Potential

High Capability Governance is an enabler of all three.

Customers expect high levels of performance and quality; the extra element needed to ensure that customer experience is exceptional is delivering rich, forward-looking governance information, which highlights risks and reveals opportunities centered on the business imperatives of the customer.

Achieving or surpassing contribution margin expectations depends on governance excellence. Unless you have access to the information you need on how performance, delivery, and quality are aligned with baseline costs then you won’t know how contribution margin is impacted nor what you can change to improve margin until it is too late.

Delivering high-quality customer experience on accounts where margin targets are met or exceeded is a recipe for business growth.

A critical point of inflexion for any shared services organization is when they start charging the business units across the enterprise for the services they deliver. Whether this is a step in evolution or part of the operating model from day one, if you charge for services the dynamic with your customers is different. They expect different levels of engagement, support and customer service. If this point arrives in the evolution of the Shared Services organization as a formal transition from an earlier ‘free to the business’ model to a charge back model the exposure is even greater.

At that point the best performing shared services teams are thinking very explicitly about high customer impact and their ability to secure financial leverage from that impact. The foundation will always be the value in the services being delivered. But in parallel there should be a focus on the quality of experience the customer has around the information the Shared Services team are delivering to their customers. Does the customer feel a deep sense of engagement? Do they receive information proactively? Do they see by the way in which the SSC team engages with them on how they are performing that they care about service and customer experience?

The most serious question the head of shared services can ask his organization is: If we have to compete for this business would we still win it? Best in class shared services organizations put the customer at the heart of their governance process. Capturing, analyzing and distributing all relevant information about the past, present and future of Services Relationships is the heart of governance. The SSC doing this consistently for all customers is demonstrating high capability governance. By demonstrating high capability governance they validate their capability in all other areas and are putting themselves in a strong position to win more business.

No leading shared services organization can deliver on customer centric governance without the right technology platform to enable their governance capability.

Outsourced and Shared Services relationships create value for those consuming the service and for those delivering the service. It is essential for both parties to the services relationship that the value is clearly understood and well communicated. The quality of that communication is as important as service delivery.

Topics to be discussed in this webinar are:

• Capability and Value in Services Relationships
• Focus on outcomes
• Effective communication and Technology

The webinar will focus on exploring these themes and set out some practical steps to assist those engaged in Service Delivery on how to communicate the value in what they deliver.

Register for our webinar ‘Communicating Business Value.’

It addresses how outsourcing Service Providers can use effective governance to drive better margins and secure renewals with key clients.  Strong operational focus on service delivery is of course essential: but it is not the only requirement to ensure deal renewal and successful renegotiation.

Topics to be discussed in the webinar are:

• Perceptions and how they are managed
• Putting the customer at the centre of the Governance process
• Use of Technology to deliver effective governance

Expect to leave the Webinar with insight into maintaining consistently positive customer perceptions of Service Delivery, retaining and growing existing customer contracts through excellent relationship management, improving deal margins, and ensuring a predictable governance process and contract re-negotiation.

‘The customer’s perception is your reality’ join the ServiceFrame team and senior leaders in the Service Provider community to discuss and learn how to develop high capability Governance in your organization.

You can register to attend this webinar by clicking here.

See the 5-minute video clip here:

The Data Challenge

The data challenge is ensuring there is a complete and accurate body of evidence capturing all the elements that have a bearing on the governance of the relationship. That evidence falls into two broad categories: (1) hard numeric data and (2) the softer customer\organizational satisfaction evidence, along with evidence on quality, an assessment of issues, risks, a log of actions etc.

All these factors will impact customer expectations. It is highly likely that this data will sit in different systems – operational reporting, transactions logs, escalation reports, email, people’s heads, and the “folk memory” of the relationship.

The Process Challenge

The process challenge is about ensuring that all of the evidence is collected reliably and consistently, and that it stands as a record over time.  It should be aggregated, subjected to comparisons or contrasts, and incorporate all the required elements for sensible decision making.

The People Challenge

The people challenge is to overcome the natural resistance and entropy that comes with manual data collection, numerical rigor, and oversight driven by metrics.

These three challenges are very real and when taken together can significantly inhibit the ability of the Service Provider to meet customer expectations, even when basic operations are delivered within contractual terms.

It is no surprise that teams with responsibility for managing service relationships spend a lot of time and energy trying to get this right.  Most commonly those teams use spreadsheets as the resource to bring the different data strands together and use that along with the experience, knowledge and relationship skills of the account manager to deliver for the customer and their own organization. They recognize that it is a core capability in a top class service provider to do this well but the spreadsheet is not a scalable, repeatable or reliable solution.

Increasingly those organizations that are best at understanding and meeting customer expectations, and (perhaps even more so) those aspiring to be best are looking at ways to improve the capability of their people and processes. Being great at relationship management requires investment in organizational capability – both in terms of the people doing the work, and the tools utilised to support it.

That investment does not imply that a complete rewrite, or replacement, of current IT / Business Intelligence / other data management systems is required. It does mean selecting a tool set which supports addressing the Data and Process challenges. In doing so it should empower employees, reduce the manual steps to the minimum necessary, and releasing their time for analysis, insight and decision making.

The tool, application or platform will ideally be light-weight, easy to implement and use. It will be accessible from any location and be easily updated, changed and adapted as the business evolves and the requirements of the customer evolve, mature and change. It should have the capability of being integrated with the IT infrastructure, reporting and transactional data management systems of the Service Provider.

But integration is not the end goal. It is a nice to have in terms of reduction or removal of manual, people dependent, processes – but the focus should be first on understanding what information is needed to help best deliver on customer expectations and demonstrate transparency, openness and clarity on service performance, execution and quality while also giving the customer the opportunity to highlight issues, concerns and risks. The Service provider should be able to demonstrate their proactivity on those actions and issues, and illustrate the recovery path in a way that feels very engaged with the customer and their concerns. Most importantly the Service Provider should be able to do this with every relationship consistently and reliably.

The data, process and people challenges involved demand a rich solution: software delivered as a service is best placed to address the ease of use, ease of change, ease of access requirement and the default objective to be cost effective. A software solution that improves the capability of the Service Provider in relationship management and which constantly assesses, and reinforces the alignment of operational execution and service delivery with the needs and expectations of the customer is the answer.

They know that customers expect attention and care.  They look for transparency in engagement and communication, they want their service provider to be proactive and always engaged, they look for rapid response, and they want rapid recovery when things go wrong.  They believe that, for the service provider, their business should always come first – and even if they are a small customer they believe this.

The mature ones will understand that things do go wrong and what matters most is how quickly normal service is resumed. The way in which customers express these requirements changes over time, and the people involved will change too – and with that change will come difference in emphasis and approach. And the service provider must respond to those changes.

The really good service providers know that how they do all of this is critical to the relationship. They recognise that this nurturing of customers never stops, and that it has a on-going resource impact for the lifetime of the relationship. Really capable and expensive resources spend time shepherding customers, staying ahead of their thoughts – knowing their business in the hope of successfully anticipating what’s coming next.

They also know that it can’t happen by accident, and won’t happen randomly, and will never be consistent or reliable if it is dependent only on the things those good account managers can do. They know that by planning for and managing to those expectations while closely monitoring operating parameters on delivery, quality and execution they can optimise the satisfaction of their customers.

The reward for that effort is retained business, long term relationships, improved margins, and predictable renegotiations.

Some customers will never be satisfied, or can’t be satisfied within the commercial constraints of the relationship. Some customers just don’t want to pay for things. Optimising satisfaction implies limits – it is not simply about a customer who is happy; it is also about making money from the relationship. The same process which addresses the expectations of reasonable customers is used to identify unreasonable customers and manage them “up or out”.

Service operations are often metric heavy engagements with tight execution parameters and high business criticality. There is a science and a discipline. Services relationships are often people heavy, the measures feel softer and more subjective (at least to the engineers) and there is a perception is that it is more of an art. The reality is that they are elements in the same equation, meeting customer expectations.

When trust is established Business Owners and Shared Services Leaders work collaboratively to meet their common goals.  These are 1) ensure that the F&A Team remain aligned to the strategic objectives of the whole company (e.g. release cash) and 2) ensure that the F&A Team remain aligned to the operational objectives of meeting cost objectives and driving improvements in service levels.  The key to establishing ongoing and effective trust is governance.  The trouble is – everyone hates governance!!!  Why?    Governance is viewed as at best a necessary evil: it is seen as a barrier to productivity, a distraction from the real work, effort that employees will avoid when they can and which is unvalued and unappreciated by employers.

In truth it is only through effective governance that real partnership can be driven between the Shared Service Centre, its customers and key stakeholders.  Good governance is the mechanism through which trust is built.  Nevertheless we must address the problem – everybody hates governance.  The solution is simple – make it easier.  Nobody wants to spend days completing spreadsheets.  Nobody has time to collate all the issues, risks and actions across the shared service centre into ‘one pack’ – and then spend time filtering it out so the right people see the right information at the right time. 

Make Governance easier!  Overcome the Hate…..

Use a technology enabler that will drive the correct governance behaviours with the minimum effort.  Make sure that KPI information on SLA can be collected easily – ideally just fully automate it from operational systems into a governance tool.  At the very least ensure that there is a workflow in place so that those responsible for reporting on KPIs are automatically notified.  Too much time is spent chasing information and formatting reports.  Your reports should be automatically visible in your governance tool – either online dashboards and more detailed excel reports – ideally both.  Don’t confine you governance process to collecting KPIs.  Your customers will not be comforted by colours on dashboards.  They will want to see information.  Information in a Shared Services context involves data on how service is affected by problems and what are the things they should be worried about.  A good governance process will demonstrate how service is impacted by issues.  It will demonstrate what actions have been created to resolve issues.  It will highlight risks and how they are being mitigated.  A good governance tool will make this an easy process.  It will be accessible by the whole team and will drive them to record important information.  This information will not only be part of the ‘trust bank’ between you and your stakeholders, it is also information which is critical to performance improvement activity with the Finance and Accounting Shared Services Team.  After all if you don’t know why services are red or amber then how can you fix them?

Make the Governance Output Relevant.

Collecting the right information is critical.  The accuracy and relevance of your information will start the trust building exercise.  When stakeholders see very clear information presented consistently they start to get comfortable.  Information that has more depth than just traffic light dashboards makes them feel a little trust.  They start to see that the Shared Service Team care about issues, care about risk.  By leveraging off powerful F&A governance platforms you can also run customer satisfaction surveys to gauge how services need to be changed.  These governance tools will allow you to rapidly change services parameters based on feedback and agreements with the governance boards.   Trust is established by presenting key stakeholders with up-to-date relevant information in an easily accessible format.  Poor service levels will always impact trust – however a clear approach to fixing problems will help manage this.

We work with many Finance and Accounting Shared Services Leaders.  They have many business objectives – two of these are consistent.  These are 1) Build the Reputation of the F&A Shared Services Team 2) Continuous Improvement.  Both of these require good governance.  Hate it.  But invest it in.