Service Process Mapping: Seeing with your …

1 Copyright 2006. Strategic thinking Institute. All rights reserved. Service Process Mapping: Seeing w ith your Customer s Eyes by Rich H orw ath Th e h olid ay season is a w on d erfu l tim e of year to realize th e valu e of Service p rocess m ap p in g u su ally by exp erien cin g oth er com p an ies d oin g it p oorly. Case in p oin t: After p u rch asin g several item s at a m ajor retailer, a salesp erson p rovid es m e w ith a free gift becau se of on e of m y selection s. I take th e item s an d free gift an d p roceed to th e ch eckou t. Th e ch eckou t p erson ch arges m e for th e free gift. After in form in g h er th at I d id n t ask to p u rch ase th e free gift, sh e sen d s m e to th e cu stom er Service d esk (w h ich h as a lin e of 15 cu stom ers w aitin g) to receive m y cred it for th is free gift.

2 Tw en ty-five m in u tes later, th is bu sin ess h as lost a cu stom er for life. A stu d y by th e Foru m Corp oration rep orts th at cu stom ers are five tim es m ore likely to sw itch to a com p etitor becau se of p oor Service th an becau se of p oor p rod u ct qu ality or p rice issu es. Research h as also sh ow n th at cu stom ers are w illin g to p ay u p to 30% m ore for an average p rod u ct if th ey receive ou tstan d in g Service from th e com p an y. Th e level of Service is also a key m eth od of in creasin g cu stom er loyalty. Loyal cu stom ers red u ce cost (n o fu rth er acqu isition costs an d low er d irect op eratin g costs), p ay m ore for su p erior Service becau se of th eir con fid en ce in th e com p an y an d p u rch ase h igh er volu m es over tim e as th eir p ositive exp erien ces grow.

3 Service Process Map A Service p rocess m ap is a visu al aid for p ictu rin g th e in p u ts, activities, ou tp u ts, p eop le an d resou rces in volved in satisfyin g a cu stom er s n eed for you r p rod u ct or Service . It acts as a tan gible blu ep rin t to assess exactly h ow efficien t or in efficien t th e cu stom er is bein g served . Relative to strategy, a Service p rocess m ap gives you a qu an tifiable w ay to d eterm in e w h ere an d in w h at am ou n t cu rren t resou rces are bein g allocated . On ce you kn ow exactly h ow you r cu rren t resou rces are bein g u sed , you can op tim ally allocate resou rces in th e fu tu re. Service p rocess m ap s m ove grou p s from a reactive to a p roactive m od e. Th ey d o th is by p reven tion n ot p reven tion as in p reven tin g p roblem s from recu rrin g, bu t rath er occu rrin g in th e first p lace.

4 As W. Ed w ard s Dem in g, th e origin ator of th e qu ality revolu tion on ce said , I sh ou ld estim ate th at m ost p roblem s an d m ost p ossibilities for im p rovem en t ad d u p to p rop ortion s som eth in g like 94% th at belon g to th e p rocess an d 6% to sp ecial cau ses. Origin of Process Mapping Process m ap p in g em erged in th e 1980s an d w as in itially d evelop ed by Gen eral Electric. GE u sed th e con cep t in th eir Workou ts, Best Practices, an d N u m ber On e or Tw o p rogram s to sign ifican tly im p rove th eir bu sin ess p erform an ce. Du e in large p art to th eir com m itm en t to th ese p rogram s, GE grew th eir m arket valu e from $13 billion in 1981 to $162 billion in 1996. Th e con cep t of p rocess m ap p in g w as first ap p lied to th e m an u factu rin g an d p rod u ction areas.

5 Toyota u sed p rocess m ap p in g to id en tify w aste in th eir p rod u ction system s an d en su re Copyright 2006. Strategic thinking Institute. All rights reserved. 2 th at each asp ect of th eir p rocesses ad d ed valu e to th e system . Com p an ies su ch as GE th en began ap p lyin g p rocess m ap p in g to th e Service sid e of th eir bu sin ess h en ce th e term Service p rocess m ap p in g. Ju st as GE w as able to u se p rocess m ap p in g to p rovid e Service stan d ard s for th eir m u ltitu d e of bu sin ess u n its an d location s, you h ave th is sam e op p ortu n ity. Service p rocess m ap s h ave becom e p op u lar becau se th ere are u su ally fou r varian ts of every Service p rocess at an y tim e: 1. Process th at is record ed in a m an u al. 2. Process th at everyon e th in ks exists.

6 3. Process th at actu ally exists. 4. Process th at sh ou ld exist. Service p rocess m ap s are essen tial as cu stom ers in all in d u stries h ave com e to exp ect m ore, exp ect it faster an d exp ect to p ay less for it. Features of a Service Process Map A Service p rocess m ap starts w ith a trigger, som eth in g th at p u ts th e Service p rocess in m otion . Th e trigger sh ou ld in som e w ay origin ate from th e cu stom er, u su ally in th e form of a p rop osal requ est or ord er. Un d erstan d in g w h at triggers th e Service p rocess can ad d in sigh t in to th e effectiven ess of su ch areas as sales targetin g, clien t selection an d m arket cap tu re. A key featu re of Service p rocess m ap s is th eir m easu rem en t com p on en t. Metrics for Service p rocess m ap s sh ou ld be p rocess-based , rath er th an ou tp u t-based.

7 Th e ou tp u t-based m etric is on ly gen erated after th e p rocess h as been com p leted an d is th erefore, reactive. Service p rocess m easu res are p red ictive in th at th ey reflect th e p erform an ce of activities th at cause th e fu tu re ou tcom es. Th e m easu rem en t com p on en t of Service m ap s are im p ortan t for th e follow in g reason s: Show s how effectively resources are used. Provides the input for analyzing root causes and sources of errors. Generates an understanding of w hat is actually occurring. Helps evaluate the need and impact of change. D elivers a consistent monitoring device to ensure that output objectives are met. For in stan ce, a p rovid er of h ealth care p rod u cts m igh t m easu re th e tim e it takes from th e in itiation of a h osp ital RFP (requ est for p rop osal) to th e p oin t th at th e p rop osal is gen erated an d sen t to th e h osp ital.

8 Or it can m easu re th e tim e it takes for a sales rep to follow -u p w ith a cu stom er after th e cu stom er s in itial con tact w ith th e m arketin g d ep artm en t. Measu rem en ts can an d sh ou ld in clu d e th e qu alitative asp ects of you r bu sin ess as w ell. In com p an ies th at h aven t an alyzed th eir Service p rocess, it s am azin g to see th e m yriad of d ifferen t w ays p eop le in th e sam e fu n ction s carry th em ou t. Wh ile it s im p ortan t for each p erson s stren gth s to be u tilized , h avin g m arketin g or sales m an agers all u sin g d ifferen t strategic p lan n in g tools an d tem p lates is in efficien t an d in effective. A Service p rocess m ap h elp s you id en tify best p ractices an d th en h ave th ose best p ractices u tilized , m axim izin g you r bu sin ess p erform an ce.

9 Benefits of a Service Process Map A Service p rocess m ap yield s a h ost of ben efits for you r bu sin ess: Focuses your people on the customer s perspective of the Service Process ; Ensures more reliable and consistent Service processes across all of the company s geographic locations and functional units; Improves the start-to-finish project time; Increases cross-functional communication; Serves as an excellent training aid for new or transferred employees; Uncovers inefficiencies and non-value added activities, forms, reports and approvals; Copyright 2006. Strategic thinking Institute. All rights reserved. 3 Rich Horwath helps managers develop the skills and expertise to create great strategy and fulfill their leadership potential. He is the president of the Strategic thinking Institute, a former Chief Strategy Officer and professor of strategy at the Lake Forest Graduate School of Management.

10 Rich is the author of Sculpting Air: The Executive s Guide to Shaping Strategy and Storm Rider: Becoming a Strategic Thinker. Please contact Rich at (847) 756-4707, email or visit Identifies obstacles and bottlenecks that are hampering the Service Process ; Provides management w ith the big picture relative to how they actually serve their customers. Creation and Implementation Th e d evelop m en t of th e in itial Service p rocess m ap p rovid es an excitin g op p ortu n ity to reth in k w h at you d o an d h ow you d o it. Com p an ies th at h ave d evelop ed an d im p lem en ted Service m ap s exp erien ce rein vigoration in th eir w ork becau se m an y tim e con su m in g an d irritatin g activities th at p rovid ed little valu e w ere rem oved from th e Service p rocess. An d u n like m an y oth er in itiatives, Service p rocess m ap s can be created an d im p lem en ted relatively qu ickly (2-4 w eeks on average).