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Planning for Choppy Waters
Service business strategies for rough economic climates.
Posted Feb 11, 2009
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Economic crisis. Slump. Depression. Call it what you will but the current financial climate has made 2008 and (and the foreseeable future) difficult for many businesses.

How does this affect service businesses? Consumers are nervous and looking to save money any way they can. If a competitor offers a lower price, or if you deliver unsatisfying customer service, the customer will jump ship. Word of mouth (or bad Internet rants) can cripple a customer base. No business can afford to take that risk.

So how does a service organization keep its customers happy and cut costs without jeopardizing service levels and sending customers packing? As a recent Forrester study says, "You can't be completely irrational, because customers are so important and customer service is so bad in this economic time, you have to spend. You need to spend now-quickly-and spend wisely."

Good advice, but where will the money come from?

Most people will tell you first to make your processes more efficient: drive better routes; automate reporting and record keeping; and update job status and dispatch new work in real time. All of this is good advice, but perhaps you've already done this. So the next step is to strive for fine-grained operational balance.

Most service businesses have a reasonable overall operational balance. Their capacity is just about sufficient to their workload. In other words, the total amount of hours available for work in any given month (for example) is roughly equal to the total time required to get all the jobs done (including travel). If you're satisfied with this, look again and examine the fine detail.

Don't you have busy days when there aren't enough service technicians to do everything and idle days when the technicians sit around waiting for a call? Do you sometimes find that the same day is both overloaded for some task types and idle for other task types because each task type requires different technician skills? How about local balance in each geographical area where you work? If your business is not balanced in any of these ways, having global balance won't help. You'll still be late for some jobs and paying overtime on the busy days, regions or task types, while paying for idle time in the not-so-busy parts of your business. Being both over-resourced and under-resourced at the same time is a "worst of all worlds" situation, and a major source of inefficiency.

Few service businesses achieve a high level of fine-grained balance because it's hard to do: A large part of the service workload is reactive, triggered by customer calls. There is no way to predict when a specific call will come. However, there are ways to predict the most likely composition of the workload for next day, week or month.

Reliable service demand forecasting can improve resource capacity planning and enable organizations to provide improved customer service levels, while utilizing budgets and resources effectively. Doing so will ensure organizations have just the right amount of technicians with the right skills to get the work done throughout the day, the month and the year. Failing to have that fine-grained balance leads to high overtime costs, low utilization, missed SLAs and worst of all, an unhappy, financially nervous customer looking for any excuse to find a new provider.

Having this kind of efficiency will also quickly deliver ROI. This is always welcome news, but it is especially important in these tough times. Being more efficient, you'll have the budget to differentiate yourself from your competition. If you have a good forecasting system, it can provide you with the inside information nobody else has. For example, if people are buying less new equipment and are now more likely to call for service for the older equipment, forecasting will detect the trend as it starts, and good planning will let you ride the rising curve of growing demand.

So, while it is imperative that companies cut the cost of doing business in this economy, service organizations should find the right balance between saving money and keeping customers happy and loyal. To do so, they'll need to find the right balance between workload forecasting and workforce capacity planning. Accurately predicting future workload and intelligently planning resources will strike these balances and actually improve customer service, differentiating a company from its competitors and leading it to new business opportunities.

About the Author

Israel Beniaminy (israel.beniaminy@clicksoftware.com) is an expert in advanced service optimization solutions. For more information, go to http://www.clicksoftware.com/.

[For more on CRM amid the economic downturn, see the February 2009 edition of CRM magazine, The Recession Issue.]

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

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