Many organizations view service as a necessary, but problematic, drain on the organization and its resources. Because of this, they do not capture the full effectiveness and productivity gains resulting from a properly positioned and structured service function. Changing this state of affairs, while not trivial, is relatively easy to accomplish.

Here are seven ways of transforming your service function into a profitable resource that contributes to achieving your corporate objectives:

1. Bring service into the picture as soon as possible, so that it helps you design maintainability into your products. Often, service is the last function brought on board during development cycles. At this stage, because of time-to-market and cost considerations, service can only react; it cannot help you improve maintainability by designing it in. Designing maintainability into your products improves not only service effectiveness, but often improves ease-of-use as well, and makes them more attractive to potential customers; all of which result in increased sales.
   


2. Create a life cycle management (LCM) focus that streamlines service delivery over the entire working life of the product. LCM has immediate benefits during the new product introduction process. All participating functions benefit:
   

   Service can maintain the product through end-of life with optimal resource use and lower cost;

   Manufacturing can better plan and optimize its buying and scheduling resulting in lower product costs;

   Development benefits by knowing up front the needs of all constituencies, the reduced scope creep helps bring products in on schedule.

   Marketing and sales benefit because these positive changes enable better margins at better prices. In short, LCM helps every single participating group.

   
   
3. Implement forecasting business models that include design, manufacturing, and service parameters as decision support tools so that your staff understands how decisions affect service and profitability over the entire life cycle. Business models enable all functions to understand how decisions affect each of them. This often reduces internal bickering and dissension, and allows rational decisions that optimize the corporate bottom line.
   
   
4. Structure your accounting and control processes to enable reporting service performance at product as well as geographic and other levels. Often, development and manufacturing know, to a high degree of precision, all the costs associated with a particular product. Service usually gets an aggregate number that lets management know how things are at the top level. This aggregation prevents service from focusing on areas where small improvements could result in greatly improved margin contributions.
   
   
5. Recognize the fact that service generally has more contact with and knowledge of your customer base than any other function, including account management. Tap into this valuable resource. Service can provide you with invaluable insight about where the customer needs additional products; this may be upgrades, replacements, or additional product for increased capacity. Sales costs for such sales are much lower than for other sales, further improving profit margins.
   
   
6. Structure service on par with other vital functions like development, manufacturing, marketing, and sales. This allows the executive level to hear and understand Service and receive timely information on your customer base. Quite often, service reports to operations, sales, or marketing. This increased layer of reporting often results in vital service perspectives being lost or filtered through other criteria. The executive team thus loses a vital source of information, maing it less knowledgeable of and sensitive to customer needs and perspectives.
   
   
7. Position senior service and support personnel as close to the development organization as possible, to encourage the interchange of ideas between them. This simple stratagem often improves product maintainability for no additional associated costs and improves product design and ease-of-use, as well. It also reduces schedule disruptions when a critical service need arises, since engineering staff can quickly collaborate with support staff in recreating failures and creating a work-around or permanent resolution.
   
   

The ROI of implementing these ideas can be quite impressive. None require major resource allocation and associated costs. All can be implemented using mainly internal resources, augmented at critical periods by knowledgeable consultants. The company's increased effectiveness in responding to customers more than compensates for the (usually minor) associated costs. Improved synergies between cooperating functions are easy to observe, but harder to quantify. However, the cumulative effect on the bottom line is significant over time.