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How Far Can Self-Service Go?

December 8, 2010

A report by SITA  tells us that, in China, “There is a remarkable awareness of the benefits, and rapid take-up, of all self-service options.”

In countries where there is limited experience of a customer service culture, is the move to self-service just a step along the path to traditional Western customer service models, or does it represent the future way of the world? Clearly, cost considerations are likely to push growing adoption of automated service delivery. Not only is it more efficient than human service, it is also less error-prone. So it would seem likely that people-based service will steadily decline and be limited to areas where specific judgment is required, or where customers are willing to pay a premium because of the personal value they see in human interaction.

This question – and any associated trend – has two aspects that should interest anyone in the field of contracting. One is the impact that self-service will have on product and service offerings. Embedded self-service capabilities will transform many business organizations and represent a route to remarkable cost reductions. They will also impact the terms of many offerings and could transform the quality of service delivery and performance. Think, for exsample, of an outsourced airline support contract covering services such as check-in and baggage management. Already there is a high degree of automation in these services – but in principle, there is scarcely any limit to how far this might go. The result is not only a major shift in how services are delivered, but also the potential it may bring for new services – for example, incremental sales to customers when they are checking in, or perhaps the offer of off-site baggage delivery as a chargeable extra.

The second aspect is the question of the impact on the process of contracting. For some time, leading companies have played with the idea of self-service contracts, whereby customers (and perhaps even suppliers) could access the electronic standard agreement and then ‘optioneer’ the specific terms they prefer. You don’t like 30 day payment terms? OK, so select 90 and the system tells you the price impact. You want some sort of extended warranty or performance undertaking? Here are your choices – and each has a different price.

In practice, outside the consumer world, I have seen little evidence of self-service contracting making progress. But perhaps China will change that. Maybe a culture that appears to be welcoming self-service will quickly adopt new approaches to areas such as negotiation. After all, the reason that people in China prefer self-service is because there is no history of customer service and therefore no one is trained in it. This same issue applies in fields like contracting and procurement. There are virtually no contract management or sourcing professionals available to hire. So why spend a lot of time and money training people to do something that has little intrinsic value and which a machine can probably do much better?


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