Boot Camp for Service Operations,

¶ … Boot Camp for Service Operations, Uday Karmarkar explains how changes in technology are often a catalyst for change as well as part of the solution to adapt for survival in service firms (Karmarkar, 2004).

The author describes realignment, redesign and restructuring as a series of continuous measures that promote the organization's ability to meet the pressures of constantly evolving dynamics.

Realignment becomes necessary because technology alters the relationship between sources, services, channels and customers. To cope, companies need to take actions such as overhauling their products, cost structures and competitive platforms. Karmarkar provides an example of the legal publishing divisions of Thomson, a company that had once provided paper-based legal information. As this material became available online, Thomson faced the danger of its services no longer providing value to its customers. However, Thomson reinvented itself as an information packaging and shipping provider by leveraging a central electronic database to develop new specialized products. Thus, technology changes fueled Thomson's revision in product strategy, but also became the solution to developing new products that would be valued in the market.

According to Karmarkar, mere process automation alone is insufficient to respond to change, processes will also need to be redesigned into an information factory such as the one at IndyMac Bank. This factory distributes processes where they are most needed and automates where appropriate. IndyMac Bank views its processes as an assembly of processes that are distributed to where they can be executed the most efficiently. and, some processes are only partially automated, leaving more complex and judgment-based processes to be executed by humans.

In IndyMac's assembly, the front end as well as the back end are automated. For example, customers and brokers have self-service capabilities for mortgage applications and brokers get assistance with application evaluation and pricing.

Last, but not least, the redesign of processes requires restructuring the organization. This is more than substituting technology for people; it's about evolving into an adaptive learning organization by building the organization around the restructured information and value chain.

This involves an interwoven organization consisting of the front office to take care of customers, the back room to handle internal processes and a group to take care of partnerships. Sharing information among the groups is essential for the organization to function properly. As part of the restructuring the company will also need new management skills such as the ability to understand the impact of new technologies, strategies and channels on customer behavior.