INFORMATION INDEPTH NEWSLETTER
Customer Relationship Management Edition
Oracle Corp
July 2012 Stay Connected: Blog FacebookTwitterYoutube
Back to the main page
New Aberdeen Report Explores Transformation of Service into a Profit Center

In a new report, Service Excellence and the Path to Business Transformation, leading analyst firm Aberdeen Group traces the business imperative and steps necessary to transform product service organizations from cost centers into profit centers.

Competitive and global economic pressures have reduced product-driven margins, so organizations are turning to higher-margin-yielding services. One widespread challenge is the need to improve existing levels of customer satisfaction. The Aberdeen study shows that high customer satisfaction leads to strong service revenue growth, service margins, customer retention, and customer lifetime value.

The new report investigates organizations that are successfully transforming their service organizations from cost centers to profit centers. Key steps include changing the organizational performance metrics to include revenue generation, opening new revenue streams via new service offerings, and supporting paid services with strong infrastructure and highly engaged teams.

Steps to Service Transformation
"The path of service transformation, and ultimately to best-in-class service performance, can't be traversed in a single step with the flick of a switch," the report authors write. "It requires a review of service business processes, investment in key support capabilities, improved knowledge sharing, and increased service business performance management."

Based on Aberdeen's study of best-in-class service organizations, the report finds eight key steps to service transformation.
  • Build an independent service unit. This is vital in the development of profit-centric strategy, the development of new services, and the integration of disparate service functions.

  • Focus on mobility to improve reactive service performance. Mobile tools with pertinent work, customer, and resolution information improve first-time fix rates, response times, and workforce utilization rates.

  • Continue to transition to preventive and predictive service models. Organizations that adopt these models experience significantly higher uptime and service-level agreement compliance.

  • Engage customers across all channels. Cross-channel strategies enable effective and consistent service experiences that increase customer satisfaction and repeat business.

  • Build a customer feedback program and share information with other business units. Sharing customer feedback throughout an organization, from marketing to design, improves the final experience delivered to the customer.

  • Focus on service contracts. Service contracts account for 50 percent of service revenues, making this a vital area of focus.

  • Build the support structures for new services. It is important to create a complete infrastructure to support new services, including pricing, sales, marketing, support, and IT.

  • Construct an engaged service team. Leading organizations make employee engagement to increase customer satisfaction a high priority, and take action accordingly.
Read the full Aberdeen report now.
Back to Top
Oracle Information InDepth newsletters bring targeted news, articles, customer stories, and special offers to business people who want to find out how to streamline enterprise information management, measure results, improve business processes, and communicate a single truth to their constituents.

Please send questions or comments to newsletter_feedback_us@oracle.com.

For answers to questions about subscribing, unsubscribing, and managing your Oracle e-mail communications preferences, please see the Oracle E-Mail Communications page.

Copyright © 2012, Oracle Corporation and/or its affiliates. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

This document is provided for information purposes only, and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor is it subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document, and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission.