Business Case: Quality Index

CRM: Measuring Service Quality via the Quality Index

Task

In the manufacturing of physical products, quality management and control have long become an integral part of the production process. In the service sector quality is not any less important. In fact, quite the opposite is true: Especially when it comes to immaterial products, quality is a critical factor in positioning oneself against competitors and often has a direct impact on success. Changes in trends and service quality can significantly affect business development. In the worst case, this could even threaten the company’s very existence. Signs of poor service quality include low productivity, dissatisfied customers, quality-based contract cancellations, or a tarnished reputation.

The INWT Quality Index makes it possible to measure service quality and perform continuous quality monitoring. This way, problems can be identified quickly and risks minimized or eliminated. It also makes employees more conscious of quality and enables companies to initiate an ongoing improvement process based on quality management.

Data

The data required for quantifying service quality is different for every company, because the relevant factors – and thus the definition of quality – depend on the business model. A CRM system’s data (customer feedback, complaints, etc.) and process performance data (processing times, reaction times, etc.) normally provide the basis for the Quality Index.

Analytics

In reality, there is no single benchmark that one can use to comprehensively describe the quality of a particular service. To make quality quantifiable, it is necessary beforehand to specify and narrow down the term for the respective company by considering various factors. So we help our clients develop a framework with which it is possible to translate the company-specific definition of quality into a quantitative structure and thus make it measurable. The main focus here is on the relationship between certain indicators (such as processing times) and the concept of service quality. This relationship can be defined either in analytical (statistical) terms or in normative (heuristic or definitional) terms. Both variations have their pros and cons. If the indicators in the Quality Index are summarized using statistical factors (e.g., in a main component analysis), the measure arrived at can claim to have made the variables more robust while minimizing information loss. Definitional or heuristic methods, by contrast, have the advantage of being able to better communicate the derived measure and put more focus on certain quality aspects (customer perspective, company perspective, etc.). We evaluate the different approaches and guide our clients through the process of defining the model optimally suited to their specific requirements.

Solution

The INWT Quality Index makes quality measurable and thus facilitates the continuous monitoring and management of this critical success factor. The implementation typically includes using a dashboard interface to integrate the tool into a business intelligence (BI) system. After the implementation is complete, our system swiftly identifies problems that negatively impact service quality. It thus boosts performance quickly by, for example, reducing the number of quality-based contract cancellations. The system also enables companies to improve service quality in a sustainable and lasting way – for example, they can use the findings to develop effective and equitable staff incentive systems. In addition, our Quality Index can be used to make employees more conscious of the quality of the services provided and to increase productivity. As a result, our solution not only makes quality measurable, but also plays a key role in continuously improving service quality and internal business processes.