Achieving higher levels of satisfaction through IT outsourcing.
By Lalit Dhingra
In offshored IT services, the characteristics of customer satisfaction have evolved as much as the industry itself. It’s no longer about delivering quality IT solutions—that’s the core of a service provider’s business. It’s also no longer about meeting SLAs, the effectiveness of account personnel, or the timeliness of service in response to a problem. Instead, the new norm in customer satisfaction is technology-enabled, value-add solutions that make a difference in the customer’s business. The focus is on generating new revenue.
In fact, 49 percent of the IT executives and technology decision-makers who participated in Forrester Research’s 3Q10 Forrsights Services Survey cited grow our overall company revenue as having high influence on shaping their firm’s IT strategy and initiatives, and 36 percent gave it a critical influence ranking. The survey had other findings that contribute to revenue generation. Improve customer service, improve the ability to innovate the business model and go-to-market approach, and launch new products and services into the market all received large percentages of high and critical influence rankings.
Customers are increasingly expecting their offshore IT services providers to demonstrate a much higher level of innovation. Three key points to achieving superior customer satisfaction include:
1. Vertical specialization. You wouldn’t hire a residential contractor to draw up plans for an office complex, a general physician to perform an appendectomy, or a fast-food cook to be the executive chef at a gourmet restaurant. They may be good at what they do, but lack the specialized knowledge required for those specific tasks.
Similarly, it’s not in your best interest to engage with an all-things-to-all-industries provider that utilizes a cookie-cutter approach to service delivery. Instead, in order to achieve goals and identify areas for innovation that are unique to your industry, your IT solutions provider must have significant depth and breadth of expertise in the vertical in which your organization operates.
In fact, industry specialization is becoming increasingly important to IT services customers. Against the backdrop of growing regulatory requirements, consumer demand and competition, 63 to 83 percent of participants in the Forrester Research survey felt that experience with a specific technology service, industry-specific business process or industry vertical was important or very important.
2. The customer comes second. Satisfying customers’ needs is an IT solutions provider’s number one priority. But providers must first empower the members of each of its vertical practices with industry-specific business insights. Doing so enables them to think in terms of the business first and IT second when designing systems and bringing innovation ideas to the table.
Truly customer-centric providers engender this domain-specific business mindset by putting all their team members through training on industry concepts, marketplace dynamics, and how the customer thinks about business requirements and growth opportunities. And to ensure full comprehension, the trainees are often certified by industry-approved, third-party organizations.
For example, at NIIT Technologies, each of our vertical practices also has an advisory board comprised of former CIOs and COOs from buyer organizations within that industry. The mix of IT and domain knowledge provide insight into industry-specific dynamics and business drivers.
3. Modernize your metrics. With customers focusing on the business value, their IT solutions providers can help facilitate standard qualitative metrics, which should evolve as quickly as possible into long-term, quantitative parameters. The decision on what quantitative measures will take the place of typical qualitative metrics should be bidirectional, based on both the customer’s goals and the value-add ideas the provider delivers.
Something else to consider is a risk/reward arrangement linked to bringing measurable value-add metrics, rather than run-of-the-mill service delivery metrics to the customer. For example, with a baseline of $100, the provider gets $80, and the other $20 is at risk. If the provider achieves 100 percent in all the business value-based parameters in the scorecard, an additional $5 is earned. But importantly, this additional $5 goes into the pockets of all the team members, not the provider’s coffer. This variable compensation plan encourages creativity and innovation in every individual working on the customer engagement. And if the customer doesn’t agree to the additional bonus money, the provider itself should pay it to the team members, not only to retain talent but also to demonstrate its commitment to its staff.
Regardless of the internal or external processes a service provider implements, the focus should always be on delivering a new level of customer satisfaction. Certainly all the elements that historically are regarded as measurement of customer satisfaction must be present. But today’s mindset must be adjusted to align with the evolution in customer needs and wants. Customer can no longer be considered satisfied until their businesses have truly been improved and revenue enhanced.
If you’re an IT services buyer, you should be asking if your provider is exemplifying their ability to deliver on customer satisfaction’s new normal. If not, it’s probably time to enter the new paradigm.
