Customer Satisfaction for ICT Organizations - dp-mc.de · QFD was developed in Japan by Professor...

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dp Whitepaper

Customer Satisfaction

for

ICT Organizations

Customer Satisfaction for ICT Organizations 1.0 October 2009 of 20

Content

Abstract ................................................................................................................................................... 3

Customer satisfaction through demand management and coherent planning: ......................................... 4

Coherent service planning with dp demand management .................................................................... 4

„What“ does the customer expect and how does he articulate it ......................................................... 6

„Voice of Customer“ ............................................................................................................................ 7

„House of Quality“ ............................................................................................................................... 9

Coherence: From customer expectation to service operation ............................................................. 11

How much is enough? ........................................................................................................................ 13

Customer satisfaction through correct implementations of service concepts ......................................... 16

Development and Provisioning........................................................................................................... 16

dp lifecycle processes for services and projects .................................................................................. 17

dp process management .................................................................................................................... 18

List of figures ......................................................................................................................................... 20


Abstract

In principle, customer satisfaction is developed from the customer’s experience with the service

and the perceived service quality. It is the result of a comparison between the service received

and the expectations of the customer in connection with this service. Customer satisfaction is

therefore the result of a comparison of expectation, that is set before the consumption (the "To

Be") and the actual experience, during and after consumption (The "As is").

Therefore the first prerequisite for high customer satisfaction is to fully understand the

customer expectations throughout the entire life cycle, to set the expectation right, at the

beginning of the lifecycle, and finally to consistently deliver against this expectation. During the

entire lifecycle, the service is experienced by multiple customer groups with different

expectations:

• The top management is interested in the value proposition of IT in the business system

and expects sufficient transparency about the costs and benefits throughout the lifecycle

of IT-services.

• The operational management is interested in the proper implementation of business

requirements into IT-service characteristics and expects measurable quality and costs

over the entire life cycle.

• The user is interested in how IT-service assists him in his daily duty and in the

functionality, performance and availability of IT-services in operation.

Figure 1: Customer satisfaction, Riegersperger (adapted)


Customer satisfaction through demand

management and coherent planning:

Often a lack of understanding of customer expectations leads to dissatisfaction. The customer

will not lie to his supplier, the supplier rather did a bad job to understand the customer's real

expectations (The "Why"), the customer requirement (The "What") and the translation into the

solution language (The "How").

An IT-service that doesn’t match the customer's expectations does not come by surprise if the

customer’s expectations do not consistently influence decisions that are taken during the entire

life cycle. “To do nothing wrong” does not necessarily mean "do the right thing" in this context.

Only a coherent approach that is aimed at “end to end customer” satisfaction will hit the mark.

Coherent service planning with dp demand management

dp Demand Management uses elements of "Quality Function Deployment” (QFD). QFD was

developed in Japan by Professor Yoji Akao and Shigeru Mizuno at beginning of the seventies.

QFD is quality method for determining the customer's real needs and the direct implementation

of the necessary technical solutions. dp has adapted the proven QFD methodology to the needs

of ICT-organizations.

Figure 2: Rational of QFD adaption for ICT-Organizations


dp Demand Management aims at creating IT-services in the way the customer expects them,

from capturing the customer expectation all the way down to the service creation and service

delivery. dp Demand Management involves all functions of the organization with quality

responsibility. The central element is the "House of Quality" which bridges semantic gaps

between cross-functional teams in order to create and maintain a linked network, to achieve

true customer value in all aspects of planning, development and operation of IT-services.

Figure 3: QFD Element “House of Quality”


„What“ does the customer expect and how does he articulate it

The first prerequisite for high customer satisfaction is therefore to correctly understand and set

the expectation of customers throughout the entire life cycle and to deliver consistently against

this expectation. Multiple customer groups with different expectations have to be satisfied

during the service lifecycle.

The IT-service enables the customers to attain their overall objectives and these objectives

shape their expectations. It is not enough to ask the customer what he wants. Answers to these

questions usually lead to the fulfillment of performance requirements, which are in proportion

to the degree of customer satisfaction. However, this is not sufficient to excite the customer

and often is the reason why the customer is dissatisfied. The service enables customers to keep

reaching for higher goals and the knowledge of these goals allows to better understand the true

customer needs.

Figure 4: Customer expectation by customer segment


„Voice of Customer“

dp Demand Management starts earlier than the traditional QFD method. Traditional QFD starts

with the customer requirements, which are then weighted with different methods, such as, for

example, "Conjoint Analysis (CA)," Analytical Hierarchy Process (AHP) or pair-wise comparison,

evaluated with anonymous clients. The actual customer comes late into the picture, in fact only

when he has contact with the product or service himself and his earlier expectation can only be

influenced indirectly.

ICT – organizations, in contrast, typically know their customers and can involve the customer

direct and far ahead of the consumption in the service design. ICT–organizations can capture

and influence customer expectation directly.

The link between customer expectations and customer requirements can be abstracted well, if

it is understood how the customer will benefit when fulfilling his requirements, which

implications it has and what knowledge and experience the customer already has in this regard.

The knowledge of these links can also be used for a customer oriented communication, all the

way down to the actual consumption experience, in order to properly manage customer

expectations.

In addition, the customer requirements many not even be articulated, because they are either

outside of his expectation (Exciters and delighters) or they are such basic requirements that are

Figure 5: Kano Modell (adapted)


simply taken for granted (Must haves). It is therefore important to know the overall objectives,

to ask further "What …" questions, "WHAT does the customer need? WHAT does the customer

want? WHAT makes sense for everyone? WHAT should be achieved?, What should not be

missed?”

Only after the customer expectation is clarified for different customer segments, the customer's

real needs are understood and lay the foundation for sustainable customer satisfaction. The dp

demand management methodology captures customer expectations and requirements with the

participation of the customer for increased transparency and proper priority setting. This

ensures that henceforth, it will be coherently and precisely worked on what is most important

for the customer.

Example: After intensive growth through mergers and acquisitions, a company wants to

standardize the business system of their operational units. This shall be accomplished by

substituting all of the local ERP systems by one common system.

Top Management Operative Manager User

Benefit: Benefit: Benefit:Best Practice Transfer Reduced cost through economies of scale Ease of use through new technologyCost reduction through synergies process improvement through best practice

transferBetter communication with international colleagues

Better agility High resource load during project Improved stability through centralized operationConsequence: Consequence: Consequence:Increased complexity in alignment and decision processes

High resource load during project Learning curve and partial loss of old functionality

No local optimized solutions Higher complexity and slower realization of local requirements

Disruption of daily business during transistion

Increased effort to maintain commonalities No local solutions Additional effort in transition periodKnowledge: Knowledge: Knowledge:Lokale Interessen Konterkarrieren Gemeinschaftsinteresse

Additional worl load during realization Additional load during introduction

Verzicht auf lokales Optimum schwer durchzusetzen

Lower productivity during ramp up Loss of productivity at start

Slow learning curve

Customer expectation

Figure 6: Customer expectation (Exemplary)

In practice, there are typically more specific customer requirements than customer

expectations; however it is an advantage to understand the link between them. The links help to

better understand the priorities of requirements and also help to find gaps that can lead to

customer dissatisfaction. Gaps include customer's expectations that are not translated into

requirements and vice versa, requirements that are not linked to customer expectations.

Competing for scarce resources, the obtained weighting serves as a reliable navigation tool that

keeps all the subsequent steps and decisions consistently on track towards customer

satisfaction. Methods such as "target costing" and "Value Engineering" can also be applied for

proper decision making. That way, the ICT-organization can, jointly with the customer,

transparently decide to not implement certain requirements without a strict “No” from the ICT-

organization.


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Customer expectationTop ManagementHigher agility through common base 0Increased complexity for alignment- and decision processes 9 3 12No local optimum 9 1 10…. 3 9 12ManagementReduced cost through economies of scale 9 9Improved process through Best Practice Transfer 0High resource consumption during project 3 3 9 15… 0AnwenderImproved communication with international colleagues 0Improved stability through central operation 9 9 18Disruption of daily business during introduction 9 3 3 3 18… 3 3Priority 9 0 0 15 12 12 3 3 9 0

HighMediumLow

Legend:9 = strong correlation3 = medium correlation1 = weak correlation Figure 7: Voice of Customer (Exemplary)

Through consistent involvement of the customer in creating the "Voice of the Customer" matrix,

the customer expectation is not only better understood, but at the same time transparently set

correctly from the very beginning. Only if the customer expectation and the target picture are

aligned, managed customer's expectations determine the subsequent steps in service design.

„House of Quality“

Once the customer requirements have been identified and mapped to the customer

expectations, the phase of development starts with the design characteristics (quality

requirements). Often a lack of understanding of the true customer requirements leads to

dissatisfaction. It is caused by the semantic gap between the language of the customer, the

"what" and the solution language, the "how", the language of the service designers, system

developers, architects, process designers and all the way down to production planners. More

often than not, the involved parties are not sufficiently clear on how the solution properties of

their respective domain contribute to customer satisfaction.

The central question is: What really are the characteristics to meet customer requirements best

and thus contribute to meeting customer expectations?


The design team, a cross functional team of development, infrastructure, operation, quality and

process planners develops a complete list of service characteristics. While doing that, the focus

should be on those requirements that contribute the most to customer satisfaction.

The central element of QFD, the „House of Quality“.

Room 1: Contains the „Voice of customer“, the service requirements in customer language

Room 2: Priority of customer requirements

dp demand management links the „House of Quality“ with the „Voice of Customer“ to

express how the customer requirements contribute to the customer expectations and

ultimately prioritize to maximize customer satisfaction.

Room 3: Contains the service characteristics that are necessary to fulfill the customer

requirements which are the service characteristic in the voice of the design team

Room 4: The relationship between requirement and service characteristic

Room 5: The roof depicts the correlation between the service characteristics in order identify

positive and negative Trade-Offs to determine meaningful configurations

Room 6: The contribution of individual service characteristics to customer expectation is

calculated by multiplying the importance (Room 2) of customer requirements with

the relationship (Room 4). The result shows which service characteristics have

highest priority with respect to customer satisfaction.

Figure 8: “House of Quality” (Exemplary)


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30 % cost reduction 9 9 3 0 0 0 0 0 0 0 3 15

Less than 10% of change budget for "one off" changes 3 0 3 9 9 0 0 0 0 21

Turnarounf time of change requests up to decision < 45 days 39 9 0 0 0 0 18

…

Operative Management

Training per user < 3 days 15 9 9 18

Availabilty Mo - Fr from 5:00 to 22:00 12 9 3 12

Problem resolution within 2 hours 12 3 9 12

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Application in local language 3 3 9 3 15

Easy to use 3 9 3 9 21

Online help & tutorials 9 3 9 12

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Characteristics priority 90 36 27 54 27 162 171 144 144 54 0 90 27 0 1026

Legend:9 = strong dependency High3 = medium dependency Medium1 = low dependency Low

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Figure 9: House of Quality (Exemplary)

Coherence: From customer expectation to service operation

Symptoms of incoherent planning can be observed in many ways:

For example the User Help Desk (UHD). If the customer expects that his problem is solved at the

first contact, he will be dissatisfied if his problem is only registered at first contact, even if the

problem is solved within the agreed time frame. The customer excitement is designed out of the

service.

In order to achieve a coherent view between service offering and customer satisfaction, all

service elements (applications, processes, operations) must be linked to customer expectations

and the links must be maintained throughout the service lifecycle. In times of scarce resources

or growing regulatory requirements, the knowledge of this relationships helps to avoid that


service characteristics are modified during the lifecycle, without understanding the impact on

customer satisfaction.

The mechanism of coherence is based on the linkage of planning steps through service creation.

The links are implemented by the house of quality concept where the predecessor step delivers

targets and priorities of the next step.

Starting from customer expectation, this mechanism links the critical targets and priorities

transparently through different domains from service conception, development all the way

down to operation. Decisions within a domain are linked to customer expectations and aim at

customer satisfaction.

Figure 10: Cascading in QFD


How much is enough?

The benefits of QFD in the early stages of the service life cycle are obvious. However, quality

management methods are often considered too abstract with excessive complexity. These

acceptance problems reduce the cost/benefit ratio and prevent the consistent use of QFD as a

preventive quality management methodology across the entire service cycle.

dp demand management counters these issues through a streamlined and less costly use of

QFD, which is adapted to the issues of ICT-organizations. dp demand management takes into

account the fact, that quality management is a holistic task. During the service lifecycle, all

involved areas contribute to the anticipated quality.

The modularized approach allows deploying pragmatic tools with a reasonable cost/benefit

ratio. dp demand management is tailored to the context of an individual customer. For

customers who already quantitatively manage their operational process, the incremental

benefit for QFD considerations in that area is only marginal. In that case it is recommended to

analyze if the existing KPI allow to manage the process according to customer expectation and,

if need be, to add missing KPIs.

Figure 11: dp Demand Management cascading through Service Lifecycle.


Figure 12: Cost benefit relation

dp demand management transparently organizes and integrates the collective organizational

knowledge along the service lifecycle towards customer satisfaction. The proven QFD

methodology ensures effective cross-functional collaboration.


This allows:

− To gain a deeper understanding of the organization’s objectives and greater clarity as to

what they mean and how they fit together.

− To new insights into the capabilities of the individual parts of the organization and its

contribution to achieving the objectives and effectively integrating this organizational

knowledge.

− To understand customer expectation from the very beginning and to influence the

expectation through transparent communication for higher customer satisfaction.

− To transparently prioritize customer requirements on the basis of customer expectations

for business and IT.

− For coherent decisions and tradeoffs along the service lifecycle based on clear priorities.

− To overcome language barriers between the involved parties and to close semantic gaps

− To avoid excessive changes in the later phases of service lifecycle and replace them by

earlier clarification of expectations and requirements (Front loading).


Customer satisfaction through correct

implementations of service concepts

Development and Provisioning

A coherent service concept was developed in Demand Management that, if properly

implemented, will achieve the desired customer satisfaction. The focus now moves from the

conception to the proper implementation of both - content and context such as cost, time and

quality.

How will the service be properly implemented?

The lack of standardized procedures, deliverables as well as roles and responsibilities leads to

significant variance and lack of transparency during the development and provisioning of IZ-

services. Also in development and provisioning, just like in demand management, semantic gaps

have to be bridged and the correctness of the crossover has to be validated with intermediate

results.

In particular, the continuous cooperation of customer and supplier across multiple domains, like

system design and service delivery, need clear rules. In the absence of such a framework,

deviations and risks are discovered too late and the respective process cannot be managed

sufficiently to control risk.

More often than not, complex applications are developed without the necessary infrastructure

knowledge, only to discover last minute problems at handover into volume production. The

resulting emergency measures are not only expensive but can also not be hidden from the

customer.

Example: Is the service designed without the early involvement of capacity planning, design

decisions are taken without proper capacity tradeoffs. As a result, when launching into volume

production, the risk of not meeting the agreed SLA is high.

Similar costly shortcuts can often be observed in application development and should be

avoided through adequate service lifecycle process and quality gate concepts.


dp lifecycle processes for services and projects

dp service lifecycle processes combine elements of project management and the V-model to

support predictable and reliable quality in the implementation of service concepts. Many best

practice templates for specifications, test reports … convey the expertise that was gathered

through the work with many international ICT-organizations. Proper deployment in a quality

gate process allow reliable and measurable execution

Figure 13: dp Service Lifecycle Reference process

Figure 14: dp V-Reference Model


It is important to find the right mixture between degree of standardization and the added value

of formalism. The focus is to ensure that the important service characteristics, with respect to

customer expectation, don’t get lost at the many interfaces during the service lifecycle. If

effectively implemented, the customer expectation reaches the final delivery without engaging

in non value added formalism.

dp process management

Customer dissatisfaction is often caused by wrongly managed operation processes, due to

wrong or simply missing KPIs. The customer requirements are translated into „Service Level

Agreements“ (SLA) which are in turn translated into “Operating Level Agreements” (OLA). The

achieved quality is measured against these agreements and reported to he customer. However,

the production processes are often not managed in a way that KPIs indicate problems before

the customer notices the problem and the delivered service violates the agreements (SLA).

For example, in the incident management process, the first call resolution rate can drop if

known problems are not captured and communicated in a timely manner. Soon after the

growth of the Known Error Database is slowing down, the First Call Resolution Rate will

follow.

SIPOC (Supplier, Input, Process, Output, Customer), a Six Sigma tool has proven to be an

adequate measurement principle to achieve the required performance visibility. With SIPOC,

Figure 15: Exemplary KPI for Incident Management


the process is followed from the customer all the way back to the supplier to define relevant

metrics to control the process coherent to the customer expectation.

.

dp „Process Management“ establishes the basis for Process Performance Management. During

process capturing, process modeling and process implementation, process key performance

indicators (KPIs) are defined and configured into a Balanced Scorecard to better understand the

interdependencies of process performance.

While the relevant process characteristics with respect to customer satisfaction are identified

during Demand Management, dp process management ensures that the relevant process KPIs

are measured and that processes are managed towards customer satisfaction.


List of figures

Figure 1: Customer satisfaction, Riegersperger (adapted) ........................................................................ 3

Figure 2: Rational of QFD adaption for ICT Organizations ......................................................................... 4

Figure 3: QFD Element “House of Quality” ............................................................................................... 5

Figure 4: Customer expectation by customer segment ............................................................................. 6

Figure 5: Kano Modell (adapted) .............................................................................................................. 7

Figure 6: Customer expectation (Exemplary) ............................................................................................ 8

Figure 7: Voice of Customer (Exemplary) .................................................................................................. 9

Figure 8: “House of Quality” (Exemplary) ............................................................................................... 10

Figure 9: House of Quality (Exemplary) .................................................................................................. 11

Figure 10: Cascading in QFD ................................................................................................................... 12

Figure 11: dp Demand Management cascading through Service Lifecycle. .............................................. 13

Figure 12: Cost benefit relation .............................................................................................................. 14

Figure 13: dp Service Lifecycle Reference process .................................................................................. 17

Figure 14: dp V-Reference Model ........................................................................................................... 17

Figure 15: Exemplary KPI for Incident Management ............................................................................... 18

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