Rising above the turf wars

Updated: Mar 31 2007, 06:51am hrs
Softperfect Pvt Ltd. is a software company and they develop software for companies in the banking and financial sector. The company has built over years specialized offers including products, consultancy and other IT services for four major categories in the targeted sector. Internally also , the company has four business units (BUs), targeting each category. Each BU is independent and had its own annual expense and capital budgets.

At a top management meeting, one and a half years back, few issues came up. The customer satisfaction index was at an all time low. The primary reason was cited as extremely slow response time from the development teams to address customer issues and enhancement requests. The BU heads countered this with their own data that R&D response time on customer requests averaged less than 2 days for a response on any customer request and less than a week for all high priority bugs fixed in the software which was better than the industry average of 15 days.

The annual capital expenses on computer servers was above the desired numbers, which was twice the industry average (normalized for revenues and number of employees). A closer analysis of the server usage indicated a low server utilization acoss the company, but the demand for servers in each BU with justifications kept unabated. Mr. Kalicharan, the newly appointed CEO, had an insight and empowered the IT head Mr. Suraj Nigam to own these issues and come out with results when previously all the BU heads would have been expected to solve these issues within their own BUs.

The conflict between the customer perception that requests were not getting adequate attention and R&Ds assessment that the software teams were updating the software in record times could be explained by the time lag between when R&D made the updated software available, and when the customer actually got it in his hands. There was no mechanism in place for customers to know the status of their requests. R&D used a bug tracking and management software internally for communications on all issues related to the product, but there was simply no mechanism in place to have closed loop communications with the customer making the request.

While Nigam knew he had some flexibility on the budget, he was not going to get any additional personnel at all. He soon implemented most of the ITIL (Information technology infrastructure library) based functions with some changes in phases and started with incident, configuration, problem followed by other functions. He took control of the capital budget from each BU, committing everyone to not overshoot and assumed ownership of this consolidated budget. He assigned a dedicated Line-IT for each BU and created project teams with only the 3-4 people he could barely afford from his existing team, but lead by a strong manager. Activity based costing was implemented to cost the services across users and processes making service catalogue meaningful.

Mr.Nigam showed how things can be changed drastically if given the right role and rights as the results speak. Within 5-6 months, the customer satisfaction index moved up significantly. There was an overall saving of about Rs.34 crores on the annual capital budget and utilization of all servers shot up significantly. The users in respective BUs were extremely satisfied with the computer power available.

Partha Kundu, Associate Director, PricewaterhouseCoopers
Online customer portal the next step

The case highlights the benefits that a software organization could realize by aligning IT Services to its business needs through implementing best practice frameworks of IT service management; adopting shared services approach for implementing IT operational needs across business units; and improving upon the end to end client delivery processes with focus on financial controls and accountability.

The customers of Softperfect were dissatisfied over the organizations response time in attending to their issues, bugs and enhancement requests for the software products. In addition, the management was concerned that while the capacity utilization of the servers were low, the demand and capital expenses incurred on procurement of servers were on the rise.

Mr. Kalicharan, the new CEO, while deliberating on the above issues during a top management review, considered it as an IT Process improvement opportunity and assigned responsibility to Mr. Nigam, the IT head, instead of leaving it on the four Business Unit (BU) heads. It was found out that while the R&D team had been achieving a turn around time on first time response and high priority bug resolution well within acceptable industry norms, the end deliveries to the clients were delayed. Moreover, the existing bug tracking and management software did not have provisions to provide customers with status updates on their requests. It was also realized that server procurement requisitions were not integrated across the Business Units with inadequate focus on capacity planning and capital expense management.

Mr. Nigam leveraged upon the ITIL framework for IT Service Management and started implementing the best practices in the areas of IT Service Delivery and Service Support. Taking the concepts of shared IT services, efforts were made to integrate and leverage synergies across the Business Units in the areas of IT procurement, capacity planning and capital budget management.

The changes brought in the desired improvements within a span of 5-6 months. Customer Satisfaction Index was brought under control, server utilization shot up, the internal users were satisfied with the IT services and there was an overall savings on the annual capital budget.

Moving ahead, Softperfect could bring technology advancements related to online Customer Self Care Portals where the customers could not only get a status update on their issues and enhancement requests but would also be able to download patches/ fixes/ upgrades, thereby reducing the delivery cycle time. Use of tools and technologies supporting the ITIL process areas, analyzing and reporting relevant metrics to develop organizational quality objectives and periodic customer meets could be taken up as continuous process improvement initiatives. The organization could even consider undertaking formal certifications like ISO 20000 certification through third party audits.

V. Venkata Rao, Professor, Indian Institute of Management, Ahmedabad
Assigning responsibility not enough

Softperfect is expected to respond to problems related to its products with satisfactory solutions within a reasonable period of time. However, recently customers were highly dissatisfied with Softperfects service. The CEO put the IT manager Mr. Nigam in charge of solving the above problems. Mr. Nigam found that the problems posed by the customers were solved promptly by the R and D teams. The customer dissatisfaction was due to lack of communication, and inadequate interface between Softperfect and the customers. The lag between fixing a problem and delivering the solution to the customer was quite high.

The problem of excessive capital expenditure was evidenced in the case of the expenditure on servers; while the demand for server capacity from users was high, the utilization of servers was quite low. Although not mentioned in the case study, it is quite possible that the different business units owned their servers separately and there was no sharing of this resource.

Mr. Nigam first helped alleviate the customer dissatisfaction, by putting in place a standard ITIL based process, which streamlined the steps in handling customer requests. The above process consists of recording the customer requests, classifying the problems, analyzing the causes for the problems reported, documenting the solution, and managing the delivery of the solution. As the process was based on a standard framework, and as everything was well documented, it is now very easy for custo omer queries. Because of the best practices embedded in the framework, even the solution delivery to the customer is prompt.

The four business units have so far operated independently and hence there was no coordination between them in their capital expenditure. Mr. Nigam centralized the budget control and operated the consolidated budget himself. This helped him reduce wasteful expenditure. By avoiding wasteful expansion of server capacity, the server utilization was dramatically improved.

Even the team sizes allocated to different business units by Mr. Nigam were frugal, because Mr. Nigam was not allowed to employ extra manpower. He allocated small teams to each business unit, but ensured good performance by making each team dedicated to one business unit, and by providing the teams with effective managers. By estimating the costs of the services appropriately, the budgeting was made realistic, and the customers could be charged for the services properly. This has definitely improved the financial position of the company. This case study highlights the importance of standard processes in providing customer service. It also illustrates that an individual to whom a problem solving responsibility is assigned can function effectively only when he is empowered fully to carry out the necessary changes and is given a clear definition of his role in the problem solving process.