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Customer-focused redesign of internal service functions

November 2nd, 2015

Customer Service


It is all too easy for internal support functions, such as IT, R&D or HR, within organizations to lose sight of their purpose and their customers over time, resulting in poor service and inefficiency. For such functions do not operate in an open market where customers are the final arbiter and can take their business elsewhere. The result can be costly and poor internal support, which adversely impacts the performance of the entire organisation. So how do organizations ensure that internal services are provided effectively and efficiently?

Such a question was asked in the European operation of a global engineering company as part of a major transformation programme driven by the business challenges resulting from the 2008 economic crash. The function in focus was a production support function, responsible for the development, maintenance and enhancement of production lines and new production technologies for multiple factories in Europe and internationally. This function was key to the business as it provided important core competencies in new production technology platforms and automation. Codexx was asked to perform a review of the function as part of the transformation programme. The specific remit was to clarify current task responsibilities and interfaces, determine key problem areas and identify required improvements. This was a sizeable organization of more than 200 engineers and technicians, centred in northern Europe, but with teams also based in Eastern Europe and China.

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A customer-focused approach
We took a customer focused, service-led approach to the review, rather than focusing on the existing organisational structure. We did this as we considered the delivery of these services as the fundamental mission of the function. If we had aligned our approach with the existing departmental structure, we would have limited our thinking. We defined four key services provided by the function and focused our review on how well these services were delivered. We then identified five key internal customers, such as the factories and the R&D function, and then interviewed them to get their views as to the key measures of success for the services provided to them.

Assessing organizational effectiveness
To review the effectiveness of the existing organisation and to point the way towards structural improvements, we asked each department within the function to determine the % of their workload spent on each of the key services and their key challenges in performing this work. We also asked each department to identify the % of their time spent working with each of the other functional departments and also their customers. This helped us identify any misalignment in the current organisational structure.

We then assessed the quality of the service delivered and the efficiency of delivery for each of the four services using workshops with the key internal customers. In these workshops we identified the key service touch points or ‘moments of truth’ to determine how well the function was serving each customer. This provided a very clear ‘voice of the customer’ which was very specific in their requirements and issues.

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Identifying service breakages
We then held workshops with the key functional departments to feed back these customer views on their service performance and to identify the root cause ‘breakages’ within the department’s operation or processes that was causing the identified issues. We reviewed each department’s effectiveness at working with other functional departments and identified opportunities for improvement. We also worked with each department to get their assessment on the effectiveness of the currently defined business processes, including how well they were documented and deployed. We found that whilst the organisation was progressive in its use of process management, with a defined set of business processes, there were weaknesses in how well these processes were actually ‘lived’ in daily business.

Defining improvements
Our approach was deliberately collaborative and we engaged 80 managers and employees in the review – covering both those in the function and those who were customers of the function’s services – so that we could be sure that we had a good feel for the function’s service requirements, its performance and key underlying challenges.

This enabled us to identify key ‘breakages’ in the existing function, such as weaknesses in the function’s role in the critical NPI (New Product Introduction) process, weaknesses in the strategy and definition of production technology platforms and challenges in providing sufficiently responsive production support. In developing improvements we maintained our service-led customer focus. We were also guided by visioning work we performed with the function’s management team that identified increasing trends of globalisation of production, increased cost focus and speed to market – which the function had to meet if they were to maintain a viable future within the organisation (for outsourcing of internal services was increasingly an option to be considered).

We asked fundamental questions (see first diagram) about how best the required services should be provided, to meet internal customer needs and to do so in a way that was affordable. Based on this and the findings from our stakeholder and internal assessment, we identified 7 key improvement projects. These covered improved internal processes – particularly in the definition of completion criteria at key stages – also improvements in the platform development approach and organisational changes to provide improved and ‘joined-up’ services to production customers. We then worked with the functional managers to define an implementation programme.

Internal service functions should be able to demonstrate effective service delivered in an efficient manner. If this is not the case, they need to be re-engineered or outsourced. A customer-focused service-led approach can be effectively used to assess the performance of an internal support function and to define any improvements required. Due to the high engagement of internal customers in such an approach, it is much easier to get their support for any required changes.

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