Research

Podcast: Are self-service technologies making your business better?

Self-service technologies, which automate routine interactions between companies and customers, are a source of convenience and efficiency to both parties — until something goes wrong and the customer cannot make the system work. Many companies should be focusing more closely on the overall customer experience, says Michael Goul, a professor of information systems and a researcher at the Center for Advancing Business Through Information Technology. Curiously, here's a case where businesses could learn something from government!

2008-06-18

Self-service technologies, which automate routine interactions between companies and customers, are a source of convenience and efficiency to both parties — until something goes wrong and the customer cannot make the system work. Many companies should be focusing more closely on the overall customer experience, says Michael Goul, a professor of information systems and a researcher at the Center for Advancing Business Through Information Technology. Curiously, here's a case where businesses could learn something from government!

Transcript:

Knowledge: Consumers love self-service technologies that allow them to make various transactions with a company more easily and efficiently — until something goes wrong. At that point, SSTs can act as obstacles to a consumer who is trying to correct a mistake or change a service. Michael Goul is a professor of information technology at the W. P. Carey School of Business.

He's also part of the Center for Advancing Business Through Information Technology, or CABIT. Here he discusses how companies can make sure their technologies don't get in the way of good business practices. I understand that you're doing research on self-service technologies. Could you explain what you mean by "self-service technologies"?

Michael Goul: Sure. I define them as software-based interfaces whereby market space service encounters require no interpersonal contact, where customers can produce a service independent of direct service employee involvement. I know that definition needs a little bit of explanation.

By "market space service encounters, " I mean a person is using some self-service technology to interact with a business to maybe make a purchase, post items for sale, search for the best price for an item, maybe even to push the button to alert OnStar that they've locked their keys in the car.

Or maybe they're just complaining about a service problem or a product failure. They really rely solely on the information technology to carry out that entire service encounter, and that's what's called "producing a service via a self-service technology."

Knowledge: It seems as if almost everyone has a story to tell about how computers got in the way of something they were trying to get done. Are self-service technologies really that successful?

Goul: The answer to that is that it depends on who you talk to. Some people really prefer self-service technologies — or we'll just call them SSTs for short — so they can get online, get the task done, find the answer they seek and then move on. So SSTs give the customer an efficient way to produce the service they want. In fact, a recent study by the Service and Support Professional Association said that 21 percent of people younger than 42 really prefer to hit the Web for a service versus making a phone call.

And actually those under 17 seek out peer-based discussion forums before they even go to a company's customer service site. From an organization's perspective, it's really a lot more cost effective to scale the SSTs to handle hundreds or thousands of customers, compared to what it would take to deploy personnel to handle and manage all those encounters. Of course there's considerable organizational investment to plan for, design, execute and govern the SSTs.

But weighed against the cost of deploying that workforce, the SSTs win hands down. So it's not to say that organizations don't do both; it's quite often that the more mundane, routine type service encounters get automated in SSTs, while the knowledge-intensive services have to be co-produced with human agents.

And it's also pretty common that the data a customer provides in a setting with an SST can be transferred directly to that human agent when there's a problem or situation that gets complex and it requires escalation. But all of that said, successful visits to these SSTs declined 4 percent in 2007, to 40 percent.

So that means that less than half of those people that used the channel didn't succeed. And there's been a steady decline in the percentage of successful visits since 2003. While there are probably many factors, one of the main ones relates to the fragmentation of service across business organizations.

Knowledge: Can you give an example of what you mean by this fragmentation?

Goul: Sure. I think to do that I want to read to you one of my favorite recent blogs by a fellow named John Ragsdale. Here goes the blog: "Last month I had the misfortune of having a credit card hijacked for fraudulent online purchases. ABC was wonderful, detecting the activity and stopping it immediately. I had direct billing from several places going to that account, and I quickly set about switching those to a different card using online self-service.

All went well for my electric bill and my "New York Times" subscription, but when I tried to change the direct billing for my home land line, Internet and satellite TV, which are combined into a single monthly bill, things went seriously wrong. As luck would have it, that month's direct billing was set to process the next day, so I felt a sense of urgency in getting it moved to a different payment source.

"The telephone company would only take direct payment online by my ABC card, so I couldn't use my XYZ card and wouldn't have a new ABC number for a week. I could have it directly billed to a bank account, but that would take two weeks to setup. So I called customer service. I knew I was in trouble when the billing system me to 'press one for land line, two for Internet, three for satellite TV' but had no option for converged billing.

I spoke with six people at four different 1-800 numbers before I got that issue resolved, and it took over two hours of my time. One lady told me I could use XYZ to make a payment by phone. Wrong. I tried to make a payment using a debit card, but to do so I had to enter the 18-digit account number for my phone/Internet/satellite bill. And where do you get that? Turns out the ONLY place to get it is on your paper bill, which I don't receive because I have paperless online billing.

"All six people I spoke with had one thing in common: the attitude that this wasn't their problem. And that, my friends, is the reason for this rant today. My terrible customer service experience is a good example of why support organizations should care about this issue." He offered several approaches for improvement also in his blog.

He says you've got to remove the walls between departments, track where the issues are, who owns them at a given time, what the next step will be, etcetera. So you can monitor the progress. Even if you can't fix the problem, at least you can tell the customer where their issue is in the process and who's responsible for the next step in the case escalation if it's required.

Knowledge: So it seems like organizations that are working together to deliver our products and services don't necessarily work together to solve customer issues or maintain a more global customer focus. What would be the advantage for organizations to do that?

Goul: That's a really good question. The focus should be on the overall customer experience. In other words, how do you delight the customer? And organizations really need to consider collaborating to plan for and design and execute and continuously improve their inter-organizational self-service technologies. There's some research suggesting that there's value for these collaborating organizations.

First of all, the world is a really a marketplace now where value constellations compete with other value constellations. So that means it's pretty difficult for an organization to differentiate themselves in isolation. You have to pretty much partner effectively when there's a high likelihood that such a partnership means that there's a big, big pie for everyone involved. Think about the Nike shoe that hooks up to an iPod.

An Amazon site where Neiman-Marcus is a sponsored link, and so forth. So an inter-firm approach to managing customer experiences should really foster the sharing of information across that value constellation, adding to the market intelligence of all the participants. One company in the constellation should be able to learn from the others, in order to improve their customer experiences. Finally, we know that repeated high-quality customer experience builds customer loyalty.

And that loyalty needs to extend to all members of the value constellation in order for each of them to compete in today's environment. And example would be, think about when you buy a Dell computer and expand it to Intel Inside. Now you can ask yourself the question, "Have the Intel and Dell collaborations of the world been effective at managing the self-service technology experience?" Well, it's hard. And we researchers probably haven't helped much in that regard.

Knowledge: I take it that we've got a ways to go before organizations tend to effectively collaborate in the delivery of SSTs.

Goul: [laughs] That's right. Ironically, we've probably got a great deal we can learn from public service in this area. And I know, I know, you're probably thinking that it's always been the other way around. Look how public service and government learn from good business practices. Well, not this time. I recently spent my sabbatical at the newest presidential school, that's the Clinton School of Public Service, and I researched this very issue.

What I found is that many county, state and even quasi-governmental agencies have become very adept at setting collaborative performance management objectives that cross agency, department, and even national barriers. And collaborative performance management is really an essential element to supporting ongoing communication and coordination. And those are two factors successful for sustaining a collaboration.

And that's been emphasized in a really recent report coming out of the University of Albany-SUNY. Just a few things to cite from that report. These people said that looking all across the cases that they identified, four overarching success factors appeared to strongly influence the performance and sustainability of these collaborations: leadership, trust, risk management, and communication and coordination.

Leadership took a variety of forms and was exercised by both people in positions of formal authority and by others based on situation and expertise. Trust of two kinds was important: public trust in the essential transparency and fairness of the initiative, and interpersonal trust in the motives and the confidence of the participants.

Risk management pertains to how to mitigate or avoid external risks, and also internal risks. Finally, the successful coordination and communication had to rely on several kinds of information sharing, like sharing amongst staff, to and from leaders, and with the public, as well as formal governance structures and informal problem solving techniques.

Knowledge: So what are you currently doing to support next-generation research that will pull some of these public service best practices into the business world?

Goul: First, I'm working to a develop a general vocabulary for capturing collaborative best practices in the area of planning for, designing, executing, and governing successful inter-firm SSTs. A new vocabulary is really needed, because you have to transcend the lingo and the acronyms that are so common within firm silos. We need generic definitions for how to find a service blueprint that will pertain to a customer's situation.

We need generic vocabulary to talk about things like data transfer from one organization to another so a customer doesn't have to retype everything again when they get ported to a partnering firm's SST. And we need to know how to plan for navigation between the SSTs of the various firms. Finally, we need generic vocabulary to find what it means to execute SSTs across the value constellations so as to delight customers.

And the vocabulary that gets defined then has to be translated to performance metrics that can be adopted and adapted by firms. So my goal is to build a repository of such metrics along with there descriptions, and a repository maintained here at ASU that organizations can take a look at and a collaboration can consider adopting them, contribute to them if they find some successful, and improve them.

Knowledge: So what would all of this mean to someone like John Ragsdale, who had the stolen credit card SST experience?

Goul: Well, we know that getting a credit card stolen is getting more and more common, unfortunately. It seems to me that companies could have thought through the details of the experience, designed a collaborative service blueprint complete with the processes necessary to make at least part of the process less painful. And they could have learned from experience and they were tracking the customer experience from a more global perspective.

The scenario is pretty interesting in that organizations who are otherwise competitors may well see an advantage from collaborating in delivering SSTs for that type of situation. I cite the ABC and the XYZ, and those are different card service companies. Further, the bundled service providers and the bank could have considered more streamlined ways to manage the experience. After all, that bundled service should imply that there will be excellent service on the back end.

Otherwise the customer loyalty for the bundle isn't likely to be enhanced. A customer may decide to go to independent providers. Finally, this scenario really points out the need for a common, more generic vocabulary for these value constellations when it comes to their SSTs. And a repository where best practices can be discovered, adopted and adapted. The alternative is that the partners just blame each other for everything that goes wrong, and that isn't the way to win in today's market.

Managing IT Innovation Faculty