‘After-sales service,’ a vibrant profit generator in business | Daily News

‘After-sales service,’ a vibrant profit generator in business

Why service industry is so important in Sri Lanka?

‘Service delivery’ is a vibrant area in all industries i.e. IT, retail, hospitality, healthcare, education, communication, automobile in any country. Today, we share the views of a service industry veteran who is having both sound theoretical and practical knowledge with proven track records, having worked in senior management positions attached to multinational conglomerates and local companies in Sri Lanka. He is a dual qualified professional in Engineering (Electronics) and Information Communication Technology (ICT) backed by the knowledge of postgraduate degree in Business Administration (MBA) in Management of Technology. His views would bring a fruitful outcome in developing a service delivery operation, irrespective of the nature of industry, how it could function as a profit centric entity. Eng. Jaliya A. Wickramasekara B Tech (Electronic Eng), Dip in Tech (Computer Eng.), MBA (Moratuwa), CITP (UK), MIET (UK), MBCS (UK) 

According to economists, all economic activities could be divided into two broader categories, namely goods and services and goods or tangible category of products produced by the industries such as agriculture, manufacturing, construction. Services offer intangible category of products such as software development, technical services, medical, all consumer services, health through industries such as Information Technology, Banking, retail trade and healthcare.

Further, to research findings in 2017, the Sri Lankan service sector contributed about 62% to the country’s GDP. The largest sub sectors within the service sector are wholesale and retail trade, public services, transportation, health services, educational services, tourism and hospitality services.

Therefore, further improving the service sector is a strength to the country’s economy and even down the line, it is good to understand the value of providing professional levels of services to their customers, especially companies belonging to various industries such as ICT, retail.

Q: Can’t we narrow down the topic to after-sales service in line with what you said lastly?

Yes, if we narrow down the said bigger picture to after-sales services, it would be more useful, especially for people who engage in the sectors such as ICT, retail attached to small to large scale companies.

Q: Could you explain about the ‘after-sales service’ operation?

If I say simply, once customers purchase products from a company, they follow a set of activities or various processes to make sure clients are satisfied with the products and services offered by them. This would help companies receive good benefits such as retaining their customers and obtaining repeat sales which is very vital for the fact that finding new customers are comparatively difficult and a costly affair. Also, it is considered as a vibrant source of revenue generation, making profits and competitive advantages in the relevant industry.

Q: Could you further elaborate?

It is an emerging concept which comprises of timely delivery, installation of products, maintenance of service quality, providing warranty, feedback, customer satisfaction and ‘Customer Relationship Management,’ which is widely known as CRM.

In service delivery, if we could maintain speed and reliability, it would create a positive impression in the minds of customers. If the products reach its destination at the right time, in exact quantity, from the right source to the right person with the right price, then we could consider that the company has moved toward its strategic goals effectively. During the warranty period, products should work perfectly, hence suppliers should make sure to provide prompt support service in the event of occurring any manufacturing defect provided to those who would help maintain competitive advantages and retention of customers, thereby, sales turnover and productivity of the organization could increase.

Q: What is the ‘Help-Desk’ and how does it perform?

The role of help desk or similar customer service centers, support centers and contact centers, are to resolve customers’ specific problems. In the1980s when main frame computers ruled IT, this concept came into act mainly to “break-fix” issues.

However, in the late 1980s, the UK government did establish a significant concept namely ITIL, in other words, ‘Information Technology Infrastructure Library,’ to increase the quality of IT services and reduce the service cost through the use of best practices. Consequently, a more improved new concept called “service desk” system came into operation to deliver better services to end-users changing before the said break-fix traditional perspective in help-desk system. In brief, a ‘service desk’ is the customer-facing point of a comprehensive service-delivery business model that could make direct a impact on customer satisfaction levels.

Actually, service management is a different subject according to ITIL, because it is a distinct profession which most of Sri Lankan companies have yet to realize.

Q: Can we expect any further outcomes from “service desk” concept?

This may well be the single biggest point of contact between the customer and the company to find first-hand customer feedback. Even a marketing team could obtain supportive information through CRM, job entering, brief customer survey results regarding resolving their incidents. By utilizing them, they could revamp their product development and marketing strategies.

The higher management also could see the service-oriented nature of the service-desk and its ability to return new values to the company. By the way, it could perform as a profit-center that contributes to variable revenue.

Q: Can’t we further improve customer services by introducing state-of-the-art technologies?

A good question. One of the technologies you may use, customercare solutions powered by ‘Artificial Intelligence’ (AI). There is a trend among many enterprises in the world to invest in AI-assisted human agent model, where human customer service representatives are supported by AI technology.

The amazing benefits arising by the use of AI for automating responses.

At any given moment, customers would be able to interact with AI robot to resolve issues. Likewise, organizations could maintain 24/7 responsive time together with uninterrupted customer services to address incoming customer inquiries. The key outcome would be quick resolution, prompt escalation, enhanced customer satisfaction and increased brand reputation. Furthermore, because of AI, you could make faster business decisions, based on outputs from cognitive technologies. Also, you could increase productivity, operational efficiencies and many more.

Q: How could you reduce the service cost and improve profits?

In ‘general service delivery,’ operation is considered a cost-center, however, we could convert it to a profit-center. The fundamental and the first step in moving from a cost to a profit-center requires to achieve the highest possible level of customer satisfaction at the lowest possible cost. That doesn’t mean we should cut down the necessary expenditure such as most of the accountants suggest, without considering the overall business perspective in a nutshell.

For instance, high expenditure for service delivery can reduce by integrating the service and products supplychain, optimize the service parts inventory, reduce obsolescence costs of service parts, thereby we could reduce total inventory costs. Likewise, manging the spare parts inventory bykeeping an eye on the inventory-turnoverratio is also vital.

Especially this system would assist cost saving immensely especially for the companies that are having Island-wide service operations including service centers and/or with franchise service operation like certain retailers in Sri Lanka. As far as my knowledge is concerned, because of the inventory management issues, some companies are compensating the inventory related losses from the earned profits. Furthermore, minimizing number of visits made by technicians to customers can reduce if they have the right part in hand, they can fix the problem.

As I explained, while minimizing the cost, you should increase the service revenue especially by selling the intangible category of technical-sales products that the service department has, such as signing Service Level Agreements (SLAs), repair services, technical solutions. For that service department should be strengthened with Technical Sales division to perform under the direct supervision of head of service operation. This is the most lucrative way of increasing the service revenue with higher gross profits than the sales department earns, which depends of the industry.

Q: Have you any practical experience of enhancing the service revenue?

Yes, out of many practical examples I will explain one success story. I joined a company which was blacklisted by certain potential clients because of the company’s poor service delivery.

They received neither new sales for sales department nor service revenue opportunities for service dept from the said customers. In fact, while improving the service levels we approached strategically from the lower level staff to the C-level executives and were able to understand from their stance the business perspectives and win their hearts gradually.

We gave firm commitments with emphasis on examining possibilities for enhancing complementarity in our services and stand on them while delivering same on-time. One lesson learnt, a big time one, in fact, you shouldn’t cheat customers. Subsequently, they opened the gates for new sales.

Both the sales and services departments could approach and new sales opportunities blossomed that brought millions worth of service revenue with the highest net-profits. Consequently, though the sales department has ended-up with further one-year loss but service team was able to convert the entire company from continuous 3-year losses to profit making state. Also, this paved the way to convert the service department from cost-center to profit-center.

The said practical example would clearly depict the strength of service delivery operation in a company.

However, sales and service operations are like two sides of a coin, a kind of a vis-à-vis operation. Sales department of a company can’t retain without the proper support of service.

Q: Should you earn profits without affecting to service levels?

Absolutely correct, as a ‘rule-of-thumb’, when earning profits, we should always keep in mind to maintain the service-excellence which should be priority number one. In order to do so, Service Management operation should come hand-in-hand promptly and aptly. It depends on bringing people, processes, technology, and strategy togetherin a perfect balance. Since success of service delivery purely depends on the support of human beings, we should motivate people accordingly in a style of the requirement of the current age.

This kind of a people management should be one of the skillsets of any successful manager. Furthermore, it is also vital requirement to review the existing processes and re-engineering them, in other words “Business Process Re-engineering” (BPR) and introducing new processes as and when required.

However, this should be carried out by adhering to the ‘change’ concept; otherwise, it will lead creating unwanted adverse effects birthing new issues.

In connection with said factors, as the head of service delivery you should require good leadership skills such as people management, listing, teamwork, impartialness, to say the least and be a role model.

Q: Do management of companies in favour of people management aspect?

It is sad to say that most of the local companies do not understand this ground reality. Most often than not, they provide all facilities and career enhancements for sales people thinking they are the breadwinners for the company and service support team is ignored.

Therefore, it is invariably noticeable that they perform their duties with great dissatisfaction, and added to that less resources is another bottleneck that drops the service levels. Countries likeUK, they do not follow double standards for employees which is a discrimination and is a serious offence. However, some multinational companies operate in Sri Lanka follow best practices, and in the near future, one may see that good corporate governance across the country that would take off the runway and is not in the farthest sight, which seems a good sign.

Q: Who should take the initiative to correct this situation?

Head of the service operation should bring their real concerns to the top management and convince them while exploring the significance of maintaining the service-excellence and service revenue which could drastically increase the net-profit of the company.

For that, he should not only be a technically qualified person but also be equipped with good business acumen plus management skills and exposure in the areas of HR development, financial, marketing etcetera with customer-centric attitude.

However, CEOs should understand and accommodate aptly the said requirements otherwise all efforts taken by the Head of the service operation will be futile and in vain. The leaders who have the right attitude together with required skillset can only bring the determined business prospects for organizations. 


 

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