SOURCE: Aberdeen, a Harte-Hanks Company

March 08, 2007 12:22 ET

Best-in-Class Service Departments Contribute 35% to Corporate Profit

Best-in-Class Companies Generate as Much as 94% More Revenue From Service Operations Than Do Average and Laggard Organizations

BOSTON, MA -- (MARKET WIRE) -- March 8, 2007 -- A majority (58%) of service managers in companies who provide post-sales service and support on products report that they are now mandated to run service operations as a profit center, according to the newly published benchmark report, "Profit Minded Service Organizations Focus on Service and Maintenance Contracts," by Aberdeen, a Harte-Hanks Company (NYSE: HHS).

The benchmark report reveals that leading companies have achieved differentiated performance in several key performance measurements, including: higher profit margins per service contract, larger service contributions to total corporate revenue, a more positive impact on overall corporate profitability, and a higher percentage of sold equipment covered by service contracts.

"We found that a greater proportion of best-in-class organizations have realized advances in these and other important KPIs than have average and laggard organizations," said Michael Israel, Research Director, Service Chain Research at Aberdeen and author of the report. "These companies are consistently proactive at devising better service contract strategies, improving service processes, managing service related data, deploying supporting technology, and measuring actual financial and operational results."

Israel offers manufacturers and service providers specific recommendations for service contract management and service profitability improvements, which include the following:

1.  Account for Service Operations as a profit center on a P&L basis.
2.  Build flexibility into the T's & C's of your maintenance contract
    offerings to meet the demands of your customers.
3.  Deploy analytics/business intelligence software to track service
    contract financial and operational performance.
4.  Implement software applications that have been specifically designed
    for service and maintenance contract management processes, including
    contract management software, service management software, and/or
    service management functionality available in CRM software solutions.
5.  Create a "Chief Service Officer" function. Centralize management of
    service operations under a senior level executive.
6.  Consider outsourcing the marketing and sales of your service contracts.
More than 280 companies participated in the quantitative study which is the foundation for the "Profit Minded Service Organizations Focus on Service and Maintenance Contracts" report. Companies responding to the survey included ABB, Air Power Equipment, Bausch & Lomb, GE, Honeywell, Ingersoll Rand, Nissan, Rockwell, and many others.

The report is made available by the underwriting of: 4CS, ServiceBench, and Services Revenue. For a complimentary copy of this report, please visit http://www.aberdeen.com/link/sponsor.asp?cid=3912

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.

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