Towards "service factory" : managing the complexity of ICT services

Abstract

Background & Focus: This study deals with the design of complex business-to-business ICT services. The importance of business services based on information and communication technology (ICT) has been increasing dramatically since the commercialization of internet and mobile technologies. The successful operation of companies in almost all industries is becoming highly dependent on their ability to harness the breakthroughs in ERP (enterprise resource planning) systems, SCM (supply chain management) systems, and CRM (customer relationship management) systems; all these systems are either based on ICT technologies or utilize them extensively.

The increase in the importance of ICT services involves several challenges, however. Increasing customer demand, the accelerating pace of technological change, changes in competencies and more customized client expectations have all forced ICT service providers to adopt to an increasing number of technologies, methods, tools, processes and conventions at an accelerating pace. This has led to an increase in the complexity of ICT services, creating challenges in service design and development, marketing, implementation, and management. When the complexity cannot be managed, it will lead to increasing production costs and systems failures. Increasing costs and decreasing service quality will ultimately result in customer dissatisfaction and defection.

Goals: This study argues that service design is a critical phase in addressing the described complexity because the design influences service production, implementation, and customer perceptions and satisfaction. Therefore the goal of this study is to construct and validate a framework and toolset for b2b ICT service design to decrease the complexity of these services and thereby decrease their costs and improve their quality.

The provisioning of ICT services itself is a complex, highly social process generally involving the co-operation of several organizational units and their personnel. The information needed in this production chain is typically embedded in processes and generally not documented. This wide organizational reach together with the tacit nature of the information creates challenges when designing ICT services. Existing service management literature provides help in individual tools such as “industrialization”, “service blueprinting”, “tangibilization”, “service scripting”, or modelling in general that have been used in the service design process as well as the design process itself. However, current service management literature falls short in providing an overall service model or explaining the practical applications of the different models or challenges associated in using them in the context of b2b ICT services.

Methodology: This constructive case study combines existing research from the service management area, strengthens them with knowledge management and social networking models and theories. By means of a literature study and material of eleven different projects in four different case studies, spanning five years and consisting of 326 meetings altogether, a service factory model is constructed and validated to reduce the complexity of b2b ICT services. The model is dived into three different parts: 1) the principles of the service factory approach, 2) the service factory framework and 3) the implementation of the service factory framework. One should note that the technical part of the model – the framework with its tools and process descriptions – is “just” another model. If the overall philosophy associated with the service design approach or the challenges associated with its practical implementation are not properly understood, it will end up being another development project that never delivered. On the other hand, if management realizes the importance of the cultural and implementation issues, they can make significant improvement Contribution: The service factory model and its evaluation make significant contributions to the service management, knowledge management and social networking theories. From a managerial perspective, the service factory model provides insights into understanding the transition from a product oriented company to a service oriented company and about the implementation of Service Factory Philosophy in a corporate environment