To remain competitive in today’s fast-paced world, businesses have to re-engineer their business processes to minimize company costs and increase their operational efficiencies. Restructuring a service desk is one way that such businesses seek to achieve these objectives. The Information Technology Infrastructure Library (ITIL) helps many businesses to achieve the same objective. This approach assumes the existence of one point of contact between businesses and customers (Collier & Agyei-Ampomah, 2008). ITIL often serves different purposes, but its conventional use is the resolution of customer issues. This focus does not however mean that the ITIL service desk has a limited role because experts say its purpose is broader than call centers, contact centers, or even help desks (Collier & Agyei-Ampomah, 2008).
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This paper focuses on important tenets of designing ITIL service desks by explaining how they affect a business’s performance. Particularly, this paper concentrates on the virtual service desk by explaining the need for businesses to shift from normal service desks to virtual service desks. Through this analogy, this paper answers important questions regarding how ITIL-based service desks improve user satisfaction, and how online user interactions (with service desk agents) improve customer trust. Deeper insights into this paper also reveal how virtual service desks reduce company costs and how centralized service desks benefit companies. However, before exploring these insights, this paper first explains the concepts of customer service and lifetime customer value because they stand at the center of this analysis.
What is Customer Service and Lifetime Customer Value?
Every business appreciates the importance of a satisfied customer. More businesses appreciate the importance of timely resolutions of customer complaints because they directly affect a business’s sales performance (the ability of customers to mirror their experiences through social media and other web-based platforms especially magnifies this fact). Customer service is therefore at the heart of business operations. Selden (1998) defines customer service as the ability of a business to satisfy its customers by providing products or services. Comparatively, Turban (2002) believes customer service involves a series of calculating activities aimed at increasing customer satisfaction (usually, businesses achieve this objective when they meet customer expectations).
Based on the above analysis, customer service often occurs when businesses transact/interact with customers. Such interactions may be virtual or real.
Nonetheless, businesses and customers may not necessarily have the same perceptions about customer service. In fact, Martinez & Hobbi (2008) say, the importance of customer service often varies with the nature of customers, businesses, and industries. Martinez & Hobbi (2008) also believe that the success of customer service also varies with the flexibility of customers to adjust to the context of their suppliers – companies.
Some researchers understand this fact from the sales process-engineering context (Selden, 1998). Through this lens, it is important to understand that customer services affect income and revenue. From the same analysis, some researchers, such as Martinez & Hobbi (2008), suggest that customer service should form part of a business’s systematic improvement process. They believe so because the quality of customer service could change the public perception of a business (Martinez & Hobbi, 2008).
Since customer service is crucial to a business’s success, many organizations seek better ways to satisfy their customers. Some businesses strive to do so by capturing customer feedback, immediately, while others depend on service desks to achieve the same goal (Solomon, 2010). This quest introduced instant feedback mechanisms in some businesses. For example, some leading travel companies in the United Kingdom (UK) have used this strategy to encourage their customers to send messages through a centralized data support center regarding their experiences with the companies (Solomon, 2010).
This strategy has proved to be successful for the companies because Solomon (2010) reports that the businesses have stopped customer defections this way. This advantage exists from the belief that most of these customers would use the company’s services next time (because of an improvement in customer experience). From this analogy, it is crucial to say the importance of customer service (to businesses) manifests in the maintenance of ongoing client relationships, which may be crucial to a business’s bottom-line. From the importance of customer service to businesses, many organizations strive to improve the quality of their customer services (Investopedia, 2013).
Nonetheless, the main challenge associated with improving the quality of customer service is the identification of the correct key performance indicators for a business. Here, it is important to understand that this challenge does not exist because of the difficulty in identifying key performance indicators, but in identifying performance indicators that reflect a business’s overall strategy. Besides identifying key performance indicators, it is also important to identify strategies that limit the focus to operational areas that matter to the business.
Lifetime Customer Value
The concept of customer service has a profound impact on lifetime customer value because it affects the net benefits associated with good relationships between businesses and their customers. Different prediction models often define lifetime customer values. The main differentiating factors are their levels of sophistication and accuracy. Berger & Nasr (1998) define a customer’s lifetime value as the monetary value of a customer’s relationship with a business, based on the projected future revenue that the customer would bring to the business. The concept of lifetime customer value has significant importance to businesses, worldwide, because it prompts them to shift their focus from their short-term profit-making ability to their long-term projected financial potential (of future customer-business relationships).
Practical use of the concept of lifetime customer value helps businesses to ascertain the maximum resources they should use to maintain a customer. This benefit falls within the concept of customer segmentation in business marketing. This philosophy stems from the works of previous scholars, such as Don Peppers and Martha Rogers (cited in Berger & Nasr, 1998), who said customers are “unevenly” important to businesses.
To affirm this view, they said, “some customers are more equal than others” (Berger & Nasr, 1998, p. 4). Based on this philosophy, Selden (1998) believes that once businesses accept this fact, they can focus more on important (profitable) customers and direct little attention to less important (unprofitable) customers. Based on the nature of this philosophy, Selden (1998) says the concept of lifetime customer value is highly important to relationship-based businesses.
Particularly, businesses that thrive on customer contacts would find this resource to be highly useful. For example, the banking and insurance industries are classic examples of businesses that depend on lifetime customer value for their success. Other examples of companies that survive on the same model include telecommunication companies and service-oriented businesses that depend on customer-referrals for their business success.
Broadly, the concept of customer lifetime value has an intuitive marketing appeal because it monetizes the value of every customer, thereby making it possible for businesses to measure how much money/resources they should use to acquire new customers or maintain existing customers. This concept works by subtracting a customer’s acquisition cost from his lifetime value. For example, if a customer’s lifetime value is $100 and the acquisition cost is $80, the customer is profitable and worth pursuing.
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Based on the above analysis, it is important to highlight the benefits of the concept of customer lifetime value to businesses. In detail, since the concept helps businesses to manage customer relationships, as assets, it also helps companies to monitor the impact of management strategies and marketing investments on businesses (Berger & Nasr, 1998). For example, this advantage easily fits into marketing mix-modeling simulators because they use the multi-year model of customer lifetime value to ascertain the value of every business customer (Berger & Nasr, 1998). Such models also help businesses to achieve an efficient allocation of business resources. The failure to achieve these advantages mainly stems from the incorrect application of the concept in business management.
How ITIL-Based Service Desk Improves User Satisfaction
ITIL-based service desks are important to businesses because they outline the first point of contact between businesses and their customers. These service desks, therefore, act as single points of contact for end-users, especially when customers have an issue they would want to settle with a company. The service desk is therefore important to businesses because it handles many activities, including daily customer issues and end-user calls (among other forms of communication between businesses and external stakeholders) (Gallacher & Morris, 2012). Therefore, using a global approach to IT, the service desk has many benefits for users.
One such benefit is the easy accessibility to assistance through a central company contact. This benefit exists within the paradigm of easy accessibility of company services to customers. Indeed, unlike in the past, where company managers and employees were inaccessible to customers, the service desk has brought them closer to the people. Besides making company employees accessible to customers, the ITIL-based service desk also offers better-quality and quicker responses to customer concerns. In fact, customer concerns that the IT department could easily solve through information accessibility disappear immediately. Customers, therefore, enjoy a quicker turnaround of user requests (Gallacher & Morris, 2012).
The availability of a single point of contact between customers and businesses is now a widely accepted concept in most modern businesses. Certainly, many businesses agree that this point of contact is essential to the provision of good customer service (Gallacher & Morris, 2012). Before the introduction of the service desk, customers often wondered which IT support team they should approach.
This confusion has been costly for businesses and customers alike because it causes delays in the resolution of customer issues. Certainly, the same problem could force some technical staff to handle issues that would have otherwise been resolved by specialized employees, or junior employees. The ITIL service desk, therefore, makes companies more efficient in addressing customer issues, thereby improving user satisfaction.
The Benefits of a Centralised Service Desk in the Company
A centralized service desk differs from other types of service desks because it offers customer services at a central geographical location. Unlike the virtual service desk (discussed below) the centralized service desk has only one address, for one location (Longo & Robinson, 1994). However, like the virtual service desk, the centralized service desk also offers many benefits to an organization. One such benefit is a reduction of operational costs.
Longo & Robinson (1994) add that a centralized service desk improves the quality of user support services for a company. User support services improve through increased access to a central resource for technical services (provided by a company). This way, a company can efficiently address customer needs. A centralized service desk also improves user support services by registering customer concerns in a centralized location and providing a comprehensive follow-through for customer concerns (Longo & Robinson, 1994).
The existence of a complete history of customer concerns also exists in such systems. This way, companies could provide customers with personalized services. Moreover, companies could provide personalized services by referring to customer complaints through a problem-management database that characterizes the most centralized database services.
Another benefit associated with the centralized service desk is resource optimization. Companies enjoy this advantage because centralized service desks offer improved technical support operations by eliminating redundancy and duplication of company activities (Collier & Agyei-Ampomah, 2008). This strategy helps companies to achieve their organizational objectives because it refocuses company resources to achieve organizational goals.
Practically, this strategy shows that the centralized service desk helps organizations to direct technical resource time to achieve organizational goals. The resource optimization advantage also helps companies to address customer concerns in a timely manner. To support this claim, Longo & Robinson (1994) associate this advantage to the technical capacity of service desks by saying the speedy resolution of customer concerns helps to identify any hardware or software design flaws that may affect user satisfaction… Such an efficient system helps to identify useful information regarding the centralized service desk, such as how many customers the company serves daily, peak times, and off-peak times. This information is useful in improving the quality and efficiency of the service desk.
Besides efficiency, the centralized service desk also offers companies immense financial benefits. These benefits accrue from the reduction of staff numbers and the introduction of cost savings in the financing of company activities. For example, Monroe Community College, in New York, realized improved cost savings after introducing the centralized service desk, as a link between the institution and external stakeholders. Initially, the college used 11,960 people to run its problem-management department (Longo & Robinson, 1994). This bloated staff had cost the company about $299,000, annually, to run the department.
However, with the introduction of the centralized service desk, the college could run the department with only 9,880 people (Longo & Robinson, 1994). The department’s operational costs were also reduced to $182,000. This way, the college saved up to $117,000 (Longo & Robinson, 1994). Alongside this cost, saving was the redirection of about 4,545 staff hours to other organizational activities. Besides these savings, the college expected more benefits from the adoption of the centralized service desk. One college administrator said, “We expect that the amount of savings realised by the department would increase proportionally as time goes on, and as help desk operators are able to resolve more problems without the assistance of technical resources” (Longo & Robinson, 1994, p. 16).
One benefit associated with the centralized service desk process is its easy adoption across different companies. In fact, Collier & Agyei-Ampomah (2008) say the process applies to different companies with different budgets and size constraints. In fact, many observers attribute the wide adoption of the process to companies that have budgetary constraints. Although experts recommend the introduction of a centralized help desk that mirrors an organizational size, many experts also agree that the introduction of the help desk has significant cost implications (Monroe Community College used about $41,000 in start-up costs) (Longo & Robinson, 1994).
However, after weighing such costs, viz a viz the tangible and intangible benefits of the centralized help desk, many observers agree that it is worth the expense (Collier & Agyei-Ampomah, 2008). The centralized help desk, therefore, offers immense benefits to different companies. However, Longo & Robinson (1994) warn that the introduction of the system does not herald the end of problem-management. Instead, companies should continue to market the help desk to guarantee its continued success.
A Virtual Service Desk and How it Reduces Company Cost
A virtual service desk is largely similar to other types of service desks. This is because, like other types of service desks, the virtual service desk provides users with one point of contact to communicate with a business. This means that all users use one contact address to communicate with a company. In detail, a virtual service desk often works by accepting customer calls in a physical structure that could do so.
For example, when a customer calls an airline company to reserve a ticket, the company may route his call to India, without his knowledge. Since virtual service desks offer a seamless transition among support desks, they pose immense benefits to companies. Companies that adopt this method mainly benefit from a reduction in operating costs. However, efficient resource use tops the list of benefits that lead to the reduction of company cost.
Choubey (2012) says virtual service desks reduce company costs because they help them to manage and allocate global help desk resources (better). The efficient use of personnel is the most notable resource use that characterizes this advantage. Particularly, virtual service desks provide companies with an opportunity to use fewer personnel in handling many calls. This way, companies may also reduce the costs associated with lengthy service calls. These advantages translate to the effective use of IT resource management, especially for companies that have to dispatch technicians to locations where customers are experiencing problems.
Time and travel expenses also decrease this way. Overall, companies enjoy increased productivity. Within the same framework, Knapp (2013) believes this advantage eliminates the possibility that some companies would experience in-person customer service calls. The possibility that these companies would experience ineffective phone-only tech support sessions also disappear. This advantage mainly exists from the fact that the virtual service desk offers companies a lot of flexibility in resource allocation. For example, Choubey (2012) says the virtual service desk helps organizations to use technical support knowledge base in different ways (this advantage often requires the adoption of appropriate software).
Most analysts who have investigated the benefits of the virtual service desk paint a more practical picture of its use in the organization. They say companies benefit from the help desk through significant infrastructure and cost-saving advantages (Choubey, 2012). These advantages exist from the efficient rerouting of customer concerns. Certainly, through technological sophistication, virtual service desks provide companies with an opportunity to manage (better) decentralized IT activities.
Companies may also assign expert technicians to address customer concerns, depending on their skill levels (through virtual service desks). This way, companies could also easily streamline customer service operations by eliminating the need to navigate through a complex network of operators (Knapp, 2013). This advantage is not only limited to customers because evidence shows that operating staff also benefit from the adoption of virtual service desk technologies, through increased control (Knapp, 2013).
Indeed, unlike other types of service desks, the virtual service desk helps to reduce worker frustrations, as they talk to non-tech-savvy customers (Knapp, 2013). This advantage potentially benefits a company because motivated employees help to respond to customer concerns, better, thereby improving the quality of the relationship (trust) between companies and their customers.
Online User Interaction with Service Desk Agents, and the Promotion of Trust
Many businesses fail to understand the dynamics of online user interactions and their effects on customer trust because of their failure to identify the differences between this type of interaction and offline interactions. In physical stores, where customers and businesses interact face to face, customer fulfillment may be instantaneous when businesses please their customers. The physical existence of businesses also creates a strong sense of trust for organizations because customers may easily go back to the business and complain about a product, or service (Tambouris & Macintosh, 2010). This analysis shows that non-virtual business interactions follow a standard and predictable process, which easily builds customer trust.
The same is false for online user interactions because of the lack of physical points of contact between customers and businesses. Such transactions also often demand payment from customers before the delivery of goods and services. Moreover, customers rarely have the satisfaction of believing that the business would meet their needs, or address their concerns. Relative to this claim Straub (2013) differentiates customers into two groups – new and existing customers. He says both groups of customers have different trust issues. To elaborate his claim, Straub (2013) says new customers are often skeptical about the ability of companies to address their concerns through the virtual service desk platform. “Old” customers also exhibit the same lack of trust by being suspicious about the efficacy of virtual service desk services.
Besides these concerns, the technology platform used to create a virtual service desk is often unclear and sometimes uncomfortable for most customers (Barnes & Hunt, 2013). Comprehensively, these problems create a trust divide between businesses and customers. Businesses, therefore, need to bridge this gap by building more trust with their customers. One way that most businesses can do so is by adopting some virtual re-embedding strategies.
A virtual re-embedding strategy may involve different measures including embedding pictures, movies, and videos to an online interactive platform to improve the quality of interaction between customers and service desk agents. Within the framework of building employee trust, Barnes & Hunt (2013) point out that adding a picture to an online interactive platform is the easiest way to build customer trust. Research has shown that most customers respond better to face-to-face interactions because it aligns with the concept of personal trust (Tambouris & Macintosh, 2010).
For example, Tambouris & Macintosh (2010) investigated the level of buyer trust for online articles and found out that most customers better resonated with authors who have their pictures on their articles. Research also shows that most players develop a deeper sense of collaboration when they exchange photos in social strategy games (Tambouris & Macintosh, 2010). Lastly, Straub (2013) gives an example of the success of print advertisements because they have pictures. He says, “Print advertisements depict human faces rather than pictures of the touted product to provide social cues to the desirability of ownership, suggesting that a simple picture is sufficient to socialise the relationship” (p. 3).
Deeper analyses into the relationship between pictures and trustworthiness in online interactions show that different researchers have provided mixed results (however, many researchers affirm a positive correlation between the two variables). For example, Steinbrück (2002) conducted a study to evaluate the perception of trustworthiness among customers who interacted with faceless service desk agents at a local bank in Massachusetts and reported that most customers considered the faceless agents as untrustworthy, compared to agents who had their pictures on. Based on these findings, Steinbrück (2002) argued that the pictures introduced some semblance of human interaction in an otherwise intangible and virtual business-customer environment.
The logic behind this principle traces to developmental psychology research, which shows that most people orient preferentially to human faces (Tambouris & Macintosh, 2010). The incorporation of the human touch in the virtual service desk would therefore build customer trust. Brick and Mortar companies provide a classic example of the importance of employee presentation in the development and formulation of customer trust.
Straub (2013) says the age and dress of the employees and the style of sales interactions are some cues that would easily influence customer trust in an organization. Comparatively this example resembles the introduction of pictures as a way of improving customer trust in an organization. Indeed, proper employee presentation in the offline business environment has the same effect as the proper presentation of service desk agents in the virtual environment.
There is however a caveat to this principle. Anecdotal research on the inclusion of pictures on online banking websites revealed that most banks lowered customer trust by putting pictures of “perfect” people on their websites (Straub, 2013). Straub (2013) says companies that make such mistakes undermine their credibility with customers. Experts, therefore, caution businesses to be “real” when adopting this strategy.
After weighing the findings of this paper, the ITIL service desk emerges as an important business station. Its design depends on the size and nature of the business. Evidence from this paper also shows that having a centralized service desk is also beneficial to businesses because it helps to consolidate the market through the nurturing of good customer relationships. Most types of ITIL service desks offer this advantage, but the virtual service desk is unique because it offers more cost benefits to businesses, compared to other types of service desks.
Businesses should therefore shift from the normal service desk to the virtual service desk because they would enjoy increased flexibility of business practices and improved efficiency. This advantage exists from the ability of businesses to practice efficient resource allocation. When designed correctly, the ITIL service desk should therefore improve business-customer relationships and subsequently improve business efficiency.
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