Since the 1990s, services characterized by a considerable geographical distance between the service person and the customer have become increasingly commonplace. Banks and insurance companies are introducing call centers or service centers to complement, or even replace, the old regional service organization. In the information and communication technology (ICT) sector, companies such as Fujitsu and IBM provide part of the end-user support for their clients from a few centralized call centers. Telecommunications operators have established call centers to serve their customers in conducting basic business transactions. To a large extent, the change in the 1990s can be attributed to ICT development. As call centers and local offices have equal access to all the information, many of the services that previously had to be provided locally can now come from a call center. Furthermore, this decade will bring new technologies that will further enhance capabilities to serve customers over long distances. They will, for instance, provide increasingly rich media for interaction between customers and remote service personnel. This article investigates factors that need to be considered when moving service production from regional offices to service centers. The empirical part of the study comprises a longitudinal analysis of the ways how Fujitsu Invia, a European IS company within Fujitsu Group, has transformed its service organization. The company has moved a long way from local, site-specific service units to national service centers, and ultimately to a few global centers that provide services to thousands of computer users worldwide. In retrospect, it can be said that the decision to centralize service production turned out to be very successful. However, the reasons why Fujitsu Invia decided to return part of the end-user support closer to customer sites illustrates the complexities associated with centralizing services that were previously produced locally.
The ability to centralize services appears to provide a cure for some of the traditional problems of service organizations. Managers of distributed service organizations are painfully aware of the difficulties to maintain an equal level of knowledge among all individual service persons in all regional offices. Centralizing the services to a call center or service center seems like an easy solution for ensuring that all customers receive equal service.
The more complex the services are, the more difficult it becomes to maintain equal knowledge in all regional offices. Hence, the analysis of forces for specialization among service staff is one of the key issues when considering the potential advantages of centralizing service production. Because of the special expertise necessary to solve the specific problems they encounter, professional service providers need a high level of specialization (Koelemeijer & Vriens, 1998). Factors that increase service complexity and thus pressure for specialization include (Mäkelin & Vepsäläinen, 1989), for instance,
diversity in customer needs and requests,
variety in the services available,
the number of situational factors that need to be considered,
uncertainty related to customer needs and circumstances,
the ability of the customer to define the services, and
the complexity of contracts used for governing the transactions.
In essence, complexity makes it difficult for a generalist service person to be able to handle all possible inquiries from all customers adequately. While generalists can deal with routine cases, specialists are needed to handle the difficult and unique cases. The main problem for producing complex services in regional offices is that it is difficult to maintain highly specialized knowledge in every regional office. The most forceful argument for establishing a service center is that the customer with a unique problem can talk with a global specialist rather than with a local generalist. In addition, the cost savings that can be achieved in regional offices (office space, service personnel) are often sufficient to make the projects acceptable in terms of financial profitability measures.
Key Terms in this Chapter
Skill: Understood as a special form of capability, with the connotation of a rather specific capability useful in a specialized situation or related to the use of a specialized asset (Sanchez et al., 1996).
Perceived Service Quality: Refers to customers’ cognitive evaluation of the service across episodes compared with some explicit or implicit comparison standard (Storbacka, Strandvik, & Grönroos, 1994).
This work was previously published in Encyclopedia of Information Science and Technology: edited by M. Khosrow-Pour, pp. 457-463, copyright 2005 by Information Science Reference, formerly known as Idea Group Reference (an imprint of IGI Global)
Capabilities: Are repeatable patterns of action in the use of assets to create, produce, and/or offer products to a market (Sanchez et al., 1996
An entity learns: If through its processing of information, the range of its potential behaviors is changed. The information processing can involve acquiring, distributing, or interpreting information (Huber, 1991).
Competence: An ability to sustain the coordinated deployment of assets in a way that helps a firm to achieve its goals (ability here is used in the ordinary language meaning “of a power to do something”; Sanchez, Heene, & Thomas, 1996).
Information: Refers to data that give meaning by reducing ambiguity, equivocality, or uncertainty, or data that indicate that conditions are not presupposed (Huber, 1991).
Knowledge: Refers to interpretations of information, know-how, and beliefs about cause-effect relationships (Huber, 1991).