Measuring performance is crucial to managing any business. This is particularly true for service organizations, which tend to be transaction-oriented businesses. Without measures of success, it’s difficult to determine if the business is meeting objectives and satisfying customer needs. The challenge many service organizations face is that they are either mired in a sea of metrics or have none at all. In addition, service organizations don’t necessarily take advantage of the true value hidden inside their metrics.
Like all businesses, service organizations should establish clear goals and then track and report their performance against those goals. To do so, they should establish a set of key indicators that will highlight the state of the business relative to their goals. If the indicators point to a problem, further analysis can be performed by examining deeper layers of information.
To highlight the key indicators, service organizations should consider developing performance scorecards. The scorecards should measure performance of the indicators versus targets defined in the organization’s goals and objectives. This will provide clear visibility of performance against goals and assist in highlighting issues that need to be explored further. Reporting too much information at the top level can cloud visibility and numb the management team to performance issues hidden in the data.
As an example, one company we work with has defined a business objective to make its service and support web site the first point of contact for customers. Its leaders want customers to access the web site, which contains large amounts of problem-resolution information, before calling for assistance. They also want customers to submit their service requests online if they do not find an answer on the site. Rather than report on the vast array of web site-related measures, the company set up, and closely monitors, a few key indicators that map to the business goal.
The key measures this company has established include web site registrations, content access, percentage of service requests submitted online and user-reported success via customer surveys. These few measures help managers determine whether they are on track to meet their operational goal of making the web site the first choice for service. If performance falls below targets in these areas, they dig deeper into the available data to identify issues that need addressing to reach the goal. The measures they have established are directly tied to the business goal and provide a concise view of performance without overloading them with data.
The company has seen its web site usage increase significantly over the past two years based on those efforts. In addition, it has identified areas of the site that needed improvement to enable a higher success rate for customers. The company is also seeing a transformation of the support organization into a knowledge engine that drives content for the web site, which is a significant change from a transaction focus of the past. Aligning key indicators to business goals and analyzing the results have contributed to that success.
Identifying key indicators is important. Once you’ve identified them, you can derive additional value from such measures, such as tracking performance versus established goals and objectives. However, many organizations get stuck in the rut of only reviewing the numbers without analyzing the underlying issues that drive performance.
Let’s take, for example, a company that measures first-contact resolution rates for its technical support organization. The group sets an objective and measures performance with the intent to increase first-contact resolution rates. Intuitively, it would seem that increasing first-contact resolution would increase efficiency, speed resolution time and potentially reduce costs to deliver support.
The base assumption that improving first-contact resolution performance would be beneficial is a reasonable one. However, a deeper layer of value lies in the nature of the issues being resolved on first contact. If you analyze the specific issues being resolved on first contact, you can identify their root cause. Root causes are generally associated with things like product defects, usability issues or poor documentation, and getting them fixed would help to eliminate these issues altogether.
Using performance data in this way would actually have the effect of lowering first-contact resolution. Because customers would no longer experience the issues, they would not need to contact support for assistance for things that were previously resolved on first contact. While lowing performance in this measure seems counterintuitive, it creates a positive effect; it actually helps eliminate service and support requests and improves the overall customer experience.
So organizations should consider the following when establishing and measuring performance:
- Create a set of no more than five to 10 key indicators that map directly to your business objectives. This will ensure management gets a clear picture of performance without drowning in data.
- Clearly define your business goals so that the key measures can accurately reflect your performance toward meeting the goals.
- Ensure that the key indicators are reported up and down the management chain so that the entire team is aware of performance versus objectives.
- Do some analysis on the performance measures to identify the hidden value associated with cause and effect. You can gain additional value by identifying the factors that influence performance and taking advantage of them.
Aligning performance measures to business objectives will ensure that the management team gets a clear view of progress toward meeting the objectives. Examining the reasons for a measurement and its underlying effect can help your management team understand the hidden value in the measures. The real value in measuring performance is not just in the numbers but also in gaining awareness into how your performance is truly affecting the business.