Service Management – Definition and Goals

A good service management offering is usually not enough to strengthen the company’s competitiveness and achieve a high level of customer satisfaction. The execution and particularly, continuous optimization of a company’s own services contribute to its success or failure. Especially in times of resource scarcity and growing competition, customer loyalty is more essential than ever. So, it makes sense to take a closer look at your own services and their management. But what does the term mean, what measures does it cover, and how can good service management help increase sales? This and much more will be explained in this article.

What is service management?

In the business world, the term service management covers all measures that focus on the customer. This includes customer communication, customer service itself, the services offered to customers before or as post-sales support, and the “management” of all these services themselves. The administration and the review of the associated measures are included in management.

In IT service management, for example, this also includes service level agreement (SLA), which regulate the scope and speed of immediate assistance in the event of technical problems.

Goals in service management

The goal of service management is not only to bring about the purchase of a product or to promote customer loyalty and satisfaction through certain measures. It is particularly important to optimize the aforementioned measures and steps in this area. This can mean optimizing the efficiency of supply chains and the use of resources as well as continuously improving the quality of the services offered. To this end, regular monitoring of the associated business processes for efficiency, cost utilization, and customer benefits plays a major role.

Processes and frameworks around service management

Which business processes and activities come into action in the service management of a company depends on the focus of the offered services. But most cases usually include the following activities:

Important processes in service management

• creation of service strategy and offerings
• positioning of services and service offerings
• go-to-market strategy of service offerings (this includes the review of the customer life cycle)
• portfolio management of all services
• warehouse management & logistics (also for spare parts), including the management of warranty, repair, and returns
• purchase orders and availability management
• technical documentation
• training and empowerment of the service team
• scheduling of service orders and the management of mobile after-sales service
• customer management
• FAQ management

However, the best orientation for service management is provided by established and, above all, recognized service frameworks. They offer standard processes, but also how-tos and best practices.

Popular frameworks in service management

In certain service segments, such frameworks are even standard requirements. Meeting them can be a prerequisite for certain services or serve as a competitive advantage.

Probably the best known of these is ITIL®, a framework developed in the 1980s, in particular, for IT service management, which provides a proven method for keeping IT services efficient. Since then, however, a lot has happened: ITIL® itself has been improved several times and various other frameworks have been developed for specific industries. These are probably the most popular ones on the list:

• ITIL® (Information Technology Infrastructure Library)
• FitSM (Federated IT Service Management)
• COBIT® (Control Objectives for Information and Related Technology)
• SIAM™ (Service Integration and Management)
• VeriSM™ (Value-driven evolving responsive integrated service management)
• CMMI-SVC® (Capability Maturity Model Integration for Services)

The 3 most important areas of application in service management

Service management is mainly used in 3 more specific areas: IT Service Management, Field Service Management, and Customer Service Management. These areas differ in particular in the nature of their services.

IT Service Management

Companies that offer IT services provide their customers with services related to information technology components such as laptops, servers, and much more. IT Service Management is specifically about managing and optimizing these services around the provision/support/maintenance or administration of IT. For IT service providers, customer satisfaction and loyalty are significant revenue factors that can be increased through efficient planning and constant scrutiny of their own services.

Field Service Management

Companies that work in Field Service Management can be defined as service providers that perform a large part of their services outside their own company or directly at the customer’s premises – in other words, they offer a type of field service. This can mean the repair of on-site technology such as the maintenance of air conditioning systems or other building technology, as well as very simple delivery services. Here, too, the most important factor is to keep the productivity and efficiency of the respective services as high as possible.

Customer Service Management

The third, and probably the largest, area affects all companies. The so-called Customer Service Management deals with the implementation and improvement of the company’s own customer service. This includes handling complaints and customer questions, but also providing the right media for contacting customers. The basic aim here is also to provide the customer with all the important information as quickly as possible, to keep the customer happy, but to keep the effort involved to a minimum.

From service catalog to good service processes – planning is half the battle

Achieving the best results with little effort – as a rule, good planning and structured visibility create the best basis for this.

In the case of service processes, as well as business processes in general, visual mapping makes it possible to see the first potential for optimization. After all, the competitiveness of the services offered is nothing without their qualitative execution. If customers receive the service or precisely the service they need more quickly thanks to efficient processes, this not only increases satisfaction but also ensures that people are happy to return to the existing service offering again and again. In service management, a distinction is therefore made between operational service planning and strategic service planning.

The former ensures the best possible use of the company’s own resources, and the latter ensures that the services offered also follow the company’s own corporate strategy. This makes upselling more likely and strengthens customer loyalty.

Service Management – key figures & Controlling

But planning and visibility alone rarely make the difference. Evaluating the right key performance indicators and controlling them at regular intervals helps to ensure good service management.

The most important factors to look at are:

• the service costs, which include material, personnel as well as space, and freight costs
• the productivity of the service staff and the efficiency of their deployment
• and customer satisfaction, which can be measured in terms of complaints, warranty costs, or the number of faults that occur.

Each company must define and monitor these key figures to be able to make long-term statements about the effect of optimization or advertising measures that have been implemented and process adjustments that have been made. Ideally, you should work with the right software that precisely provides these key figures and creates the structural prerequisites for evaluating them.

Service Management Software OTRS

Whether in IT Service Management, Field Service Management, or Customer Service Management, things are simply easier with the right software. OTRS helps to structure internal and external communications, to document and assign them correctly, and to evaluate the actions taken.
The use of resources and their efficiency and productivity can be planned as well as checked and tracked afterward.

In addition, the use of OTRS provides customers with multiple media/channels through which customer communication can take place. The browser-based web application keeps field staff up to date, even on external assignments, and ensures that no important step is forgotten with existing and automatable process flows.

Do you have questions about how OTRS can help in Service Management? Our experts will be happy to help you.

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