SOURCE: Aberdeen Group, a Harte-Hanks Company

June 06, 2007 14:09 ET

Strategic Service Management Yields 14% Higher Profits

Forward-Thinking Organizations Leverage Post-Sales Service to Drive Profitability and Competitive Differentiation

BOSTON, MA--(Marketwire - June 6, 2007) - Shrinking product-based profit margins, commoditization and intense global competition has compelled corporate executives to increasingly rely on their post-sale service operations to drive corporate growth. Eighty-nine percent (89%) of best-in-class organizations recently surveyed by the Aberdeen, a Harte-Hanks Company (NYSE: HHS), stated that they currently manage their service operations as a profit center -- a great litmus test to examine whether a company has embraced the tenets of strategic service management.

"Strategic service management represents a fundamental shift in how a service operation is managed," said Steve Roth, SVP of the Strategic Service Management Practice at Aberdeen. "Forward-thinking companies have moved away from managing service as a tactical cost center to a strategic profit center. They have rejected the traditional siloed approach in favor of a more holistic and integrated approach which includes managing resources (people, parts, vehicles), partners (internal, external), contracts, and customers with a razor-sharp focus the corporate goals and objectives."

The recently published study -- "Strategic Service Management: Moving Beyond the Tactics" -- reveals that service organizations which have changed their business processes to fit customer needs and have adopted integrated, service-specific technology solutions to strategically leverage their service operations have realized such gains as 17% improvement in SLA compliance, 16% increase in service revenues, 14% higher customer retention and service profits. Interestingly, profit-centric companies dedicate 21% of their IT budget to post-sale service optimization initiatives.

According to the report, other benefits of a strategic approach to service include:

--  19% decrease in service response time.
--  15% improvement in days sales outstanding.
    
Roth recommends that service organizations consider the following best-in-class strategies to build a strategic post-sale service organization:
--  Migrate to a preventative and predictive service model.
    
--  Tie compensation to financial, operational and customer retention
    metrics.
    
--  Offer multi-tiered service level agreements and contracts.
    
--  Appoint a senior executive who directly reports to a CXO.
    
--  Conduct systematic planning, forecasting and alignment of service
    resources and demand.
    
280 companies participated in this quantitative study, including Brooks Automation, Panasonic Factory Solutions, Yaskawa Electric, Northrop Grumman, Gerber Scientific, Respironics, ABB Robotics, Eastman Kodak, Invacare, Intel, Toshiba America.

Underwriters of the Strategic Service Management: Moving Beyond the Tactics, are Servigistics and PointServe.

To obtain a complimentary copy of the report, follow the link: http://www.aberdeen.com/link/sponsor.asp?cid=3993

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information -- Opportunity -- Insight -- Engagement -- Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

© 2007 Aberdeen Group, Inc., a Harte-Hanks Company
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