This paper describes those particular factors that really drive the QOS (Quality of Service) as perceived by the customer. The paper argues that 'soft services' are the real and actual features of a business service that customers really value and not the 'hard' service as usually imagined and focused upon by the provider of the service. So for example, when giving their opinion of a Telecoms provider, people will make their judgement upon how their account queries are handled - in place of the actual quality of the telephone line service. Therefore to succeed service providers need to identify the true 'soft service' elements of what they do and improve them, or find new ones the customers really want. Originally published in 2009, written by Dave Amos.

1. Web Enhanced Soft Services In The Corporate Sector
Bruce Elson
School of Engineering Systems and Information Technology
University of Central England
Birmingham B42 2SU (UK)
Bruce.Elson@uce.ac.uk
David Amos
Information Services Manager
BSS Group Plc.
Leicester LE1 SSU (UK)
DCAmos@Aol.com
John Griffiths
School of Engineering Systems and Information Technology
University of Central England
Birmingham B42 2SU (UK)
Abstract : This paper describes the issues facing service organisations that must be addressed to ensure
success when selling services to corporations. The dichotomy faced by to-days corporate organisation is created by
the desire to ‘downsize’ their costs yet increase their delivery of product to their customers. These two objectives
initially appear to be incompatible with each other. Generally the decision to downsize is taken by the directors of
an organisation who have no specific idea of how the new structure will adapt to cope with increased demands and
reduced employee capacity. The solution to the problem is generally left to middle managers who as yet are not
able to buy the new services they invariably need. This change is usually forced upon company directors by
external pressures created either by a changing market or profit expectation. In particular the fast developing area
of electronic commerce is creating urgent demands on all organisations as market prices fall and existing operating
cost profiles cannot be sustained. Middle management is therefore often faced with the need to adapt very quickly
without the resources to do so. The only expedient solution is to request the existing supply chain to provide
extensions to their existing services so as to allow the organisation to continue operating at a lower cost base.
Herein lie opportunities for those service organisations that can change their service provision to meet the new
requirements of their customers. This is achieved by taking a holistic view of the customers requirements
combined with utilisation of modern Web based solutions.
Introduction - Service Perspective
To describe the new logistical services one must first review what service actually is.
For this purpose ‘service’ can be split into two general types, Hard and Soft. Hard services can be
generally described as something you can 'kick' i.e. the physical service, which normally customers
would describe when asked what they actually buy. So for example the hard service associated with a
train journey is the journey its-self, using the station, sitting in the carriage, arriving at the destination,
and so forth. The soft service surrounding the journey would be the telephone enquiry about departure
times, the purchase of the ticket, departure and arrival accuracy, quality of the carriage, etc. Another
clear example can be seen when making a phone call. The hard service relates to the handset, line
connection and quality. The soft service surrounds the customer experience when any contact is made
with the Phone Company, such as the clarity of billing information provided, or when a call is made to
query a usual charge.
Service Opportunities
This purpose of this paper is to describe how any organisation can win new corporate customers by
focusing on the soft services that surround their physical service. These new soft services are required
by organisations that are continually downsizing creating new opportunities for expansion of the soft
service industry, see figure 1. As the organisation with its multiple layers of internal service provision
downsizes towards a flatter operational structure it provides opportunities for suppliers to deliver
services. These are usually soft services, which can be delivered faster, more cheaply.

2. Soft Service Issues
One of the issues that should be fully understood is the importance of the quality and scope of soft
services to the success of winning and retaining corporate customers. In this respect consider the
statement ‘hard service is irrelevant’. Note that the quality of hard service i.e. Delivery is still critical,
but is becoming irrelevant in to-days world of changing customer expectations. For example, millions
of people use the common telephone over landlines millions of times a day. How many of these calls
fail, or do not connect, or are of poor speech quality – very few. Should a survey of users be conducted
on these factors all normal quality indices would probably be at 100%. Customers would not think to
complain about the quality of the Hard Service they receive since it is not an aspect of use they are
aware of.
Therefore it can be seen that the general quality of hard
service is already so high that it has become invisible to
the average user, i.e., it has become irrelevant. The
customer increasingly expects services to work first time
and to fail hardly ever. The increasing use of computer
aided design and robot assembly is leading to products
whose physical operational qualities are indiscernible
from others, by the average user. Take a piece of hi-fi
equipment, 98% of typical purchasers are not able to
discern the difference in the sound quality produced
between competing products, or the differences are so
slight as to be insignificant. The quality of modern
electronics has made the hard features of the product
irrelevant. Invariably hi-fi is purchased according to its
aesthetic looks and control features - all soft features.
Another clear example of this can be seen in modern cars,
hard features such as design and engineering quality are so
very similar, that customers hardly consider reliability
when choosing a car. In fact, they are chosen on factors
such as style, cabin features, colour and so forth, all soft
features of the product.
Other factors are usually associated with the quality of the
local dealer where the regular maintenance is carried out.
Figure 1. Service Opportunities
The consequence of this is that soft service is now the delineating factor when customers come to
choosing their supplier, or more likely the factors which cause them to leave their existing supplier due
to the poor quality of the soft services provided. Thus the quality of the soft services surrounding the
use of the physical service has become paramount. Nowhere is this of greater importance than in the
corporate organisation.
Corporate Organisation versus Public Organisation
All of us regularly experience poor quality of soft service. Who has not phoned a Call Centre for some
reason, to be left in a queue listening to music whilst waiting to be answered? The reason that
companies can get away with such a level of soft service is that we are one experience in a million, and
therefore do not count individually (except of course as a general trend). Also the public has become
used to poor level of soft service while expecting an improved level of hard service. When ringing to
report a fault, a poor quality of service is expected e.g. a Call Centre's ‘music-on-hold’ queue or the
service repair man missing his appointment. Yet people expect televisions and other electrical
appliances to last forever.
Multiple
Layers of
Internal
Service
Provision
Flatter
Operational
Structure
Represents
Service
Opportunities

3. This is the conundrum of modern society, things hardly ever fail, but when they do, the soft service
experience does not match the quality of the original product. Being left in a call centre queue has
become ‘normal’ and therefore not something to complain about or sufficient to cause a change of
supplier. In this situation, suppliers who irritate or alienate customers are unlikely to lose much of their
customer base, or, if they do, the customer is liable to experience similar low levels of soft service
elsewhere.
However, this situation is totally reversed where corporate customers are concerned. Here the soft
service provided might be experienced by just one individual who has the buying power of thousands
and, to some degree, the ability to change a supplier at will. Therefore a poor level of soft service will
lead to dissatisfaction and eventual loss of the customer.
It can be seen therefore that since hard service is irrelevant, soft service becomes critical when selling
to corporate individuals. These individuals are the middle managers who have been given the task of
delivering the same level of hard service within the organisation with fewer staff, less personal time
and less resource.
Attributes of Corporate Soft Service
As organisations downsize the remaining individuals are left with an increase in the scope of their own
responsibility. It is now typical to find a telecommunication manager with responsibility for all
building phone systems, all fax machines, all mobile phones, all wide area networking equipment and
so forth. The scope may amount to many thousands of items of equipment, used widely throughout the
organisation. Typically this will have a value of many millions of dollars and be critical to the
effectiveness of the organisation.
Prior to a down sizing operation, a variety of internal staff would be required to organise new
provision, arrange relocation, call for field service repair, and process numerous supplier invoices. In
this situation soft services should be focused such that the individual can not only continue to deliver
the existing hard service but improve the quality compared to that historically provided. A critical
factor is time. Soft services which will win new customers and retain existing ones are those which will
reduce the time expended by individuals, whilst still providing an increase in the delivered hard service
supplied.
Crucial aspects of soft service can be described as follows:
1. New Service provision
2. Change Management
3. End user support
4. Flexible Contracts
5. Billing
6. Cost distribution
7. Web based data maintenance & feedback
8. Management Reports.
These can be delivered by means of a Soft Service Model, which is described in more detail in the
following sections.
Single Supplier
This should be the first objective of both the supplier and the customer, but is the hardest to achieve.
It represents the most efficient arrangement for the provision of any hard service to a corporate
customer. The benefits derived from simplicity are tangible and can lead too large, though invariably
invisible, cost savings for the customer. Single supplier contracts are easy to negotiate but often
difficult for the supplier to retain due to the fact that the organisation behind the sales team is not often
set up to support the customer needs. Typically these are won on a basis of hard service cost price,
whereas suppliers should be approaching the contract as a total service provision, with the value of the
soft services provided costed separately to that of the hard service. Indeed, there are opportunities to
secure single source agreements based upon the provision of soft services, which can lead directly to a

4. reduction in internal cost for the customer. Suppliers need to be certain that they can replace the soft
services previously provided by (replaced) internal staff. These cost reductions can be considerable in
value but difficult to provide without a clear understanding of requirements.
It should also be noted that any failure in service provision is directly experienced by the middle
management responsible for the contract. This can be as a result of complaints made by end users
directly to the individual they perceive as ‘to blame’ for the quality of the external supplier service.
Poor service therefore results in an emotional response to the supplier, based possibly upon the
experiences one or two vociferous or important end users and can result in the loss of contract for a
comparatively unimportant drop in soft service levels to a few individuals.
This aspect might be described as the ‘concave lens’ effect, where a small loss of service is focused and
magnified on to one individual, whereas in general a service to the public is typified by the ‘convex
lens’ effect. Here poor service can go unnoticed by the provider since complaints are dispersed
amongst many users and do not reach the senior levels they should.
Crucial to the operation of a single supplier contract is the scope of the soft services provided.
Account Management
This is absolutely critical to the success of any soft service provision, and is often not understood or
undervalued by the supplier. It can be described pictorially by the four layer ‘soft service model’ shown
below in figure 2.
4-Layer Soft Service Model
The ‘soft service model’, is based upon two inverse pyramids and maps the four layers of each
organisation to each other. It can be seen that the end user layer of the customer is furthest away from
the hard service layer of the supplier, while the pinnacle of each pyramid (layer 1), the focus point of
the service between the two organisations, are closest. Layer 1 is the primary soft service layer and is
responsible for all other service layers.
Traditional supplier organisations see the Account Manager role as primarily that of sales, which is
only true when the individual focuses on ensuring the delivery organisation can provide the soft
services needed, or indeed, identify new soft services which typically operate in layers 3 and 4.
Suppliers that appoint sales representatives, invariably sell hard service only, usually based on price.
Account managers need to focus on the total cost of service, and co-ordinate their offering around soft
services. Price is then of secondary importance since the value of the soft services provided can be
high.
Layer 2 is a soft service layer and represents the administration staff in each organisation that manage
the detail of the service provision. This relates to the service aspects of:
• New service provision
• Change management
• End user support.
Layer 3, is the ‘back office’ soft service layer, which typically provides service aspects such as:
• Billing
• Cost distribution
• Web data maintenance
• Management reports
Layer 4 represents those parts of each organisation, which either use or deliver the hard service
purchased. It should be noted that end users experience service provision from layers 2 and 4, whereas
the buyer experiences service from layers 1 and 3.

5. Figure 2. The 4-Layer Service Model
By reference to the soft service model it can be seen that the normal pyramid view of customer service
is reversed when provision is targeted at a corporate customer. The traditional pyramid view has
WEB
ACCESS/
UPDATE
DATABASE
END USER LAYER
BUYER
ACCOUNT
MANAGER
PROVISION LAYER
TECHNICAL
SUPPORT
TECHNICAL
SUPPORT
Directors and
Functional
Management
Directors and
Management
HTML
Itemisation
INTRANET
Reference for
Cost Centre
Management

6. customers at the bottom of the pyramid with directors and senior managers remote from any direct
customer feedback near the top (fig.3). This model accurately maps the experience of the general
public when dealing with any large organisation. Traditionally this model has been used to carry out
marketing surveys to provide the senior managers in the supplier organisation with feedback upon how
they are performing. However, with the soft service model (fig.2) it can be seen that the supplier
account manager and the corporate buyer both directly experience any failure in the service provided.
This encourages them to work together to agree a framework for the supply of the service(s). Direct
responsibility for the operation of its provision will help give greater focus on the structure and
operation of the interface. The account manager should therefore be someone senior within the supplier
organisation and who has direct access to senior line managers in layers 2 and 3, with sufficient
authority to agree to and accomplish changes within the suppliers service operation.
Figure 3. Conventional Service Model
1. New Service Provision
This important service layer is described by layer 2 of the model, and often is thought of as the only
aspect of soft service by suppliers and buyers due to its obvious nature. However it has many facets
which provide a quality soft service for the buyer:
• Umbrella contracts – obviating the need for purchase orders
• Hardware packages – obviating the need to repeatedly define each end users requirement
• Installation
• Post Installation review
• Project Management
• Sub-contract management
• Project focused bills
• News Groups
All of these aspects of service reduce the resources needed by the internal department of the customer,
and specifically reduce the time expended by the buyer in managing the provision. In this respect soft
services are a key selling point for the supplier and a major benefit for the buyer – who may not be able
to provide the service that is required by any other means (with less staff etc.).
Managers
Support
Provision
Directors
CUSTOMER END USERS
Marketing
Surveys
SERVICE

7. New service provision is a well understood area of soft service, but Project Management and Sub-
contract Management are areas that are often overlooked and usually seen as a profit add-on by the
supplier rather than an opportunity to enhance services. It must also be stressed that these two areas
need to be well executed, if provided by the supplier, since poor performance can lead to failure of the
project and hence loss of the customer.
Project management often brings the supplier's staff into direct contact with the customer's own end
users. In these circumstances, the staff should act as if they belong to the team operated by the buyer.
This requires project managers to adopt a particular mind set, since they are likely to be imposing
standards set by the buyer (in terms of the hard service to be implemented) over which the direct end-
user has no choice. This reverses the normal supplier-customer relationship.
Sub-contract management is a direct time saving soft service, which benefits the buyer. Specifically it
reduces the number of contacts and contracts that the buyer has to deal with. However, the account
manager should ensure his organisation applies sufficient time in managing the third party to ensure
that they are meeting the quality objectives set by the buyer. Regular reports covering the sub-
contractor's performance should be available to the buyer. Often it will become a requirement upon the
supplier to incorporate existing third party suppliers of the customer so as to provide an umbrella
operation. This may mean taking over responsibility for hard service contracts that already exist and
have some years left before term.
Project focused billing should be developed as a key aspect of soft service. All large organisations
implement changes via projects. Many of the studies that have been carried out show that the overall
costs for the project are rarely analysed following implementation, and therefore the cost effectiveness
of the new operating method is unknown. The opportunity to provide this analysis becomes of key
importance to service organisations, since the majority of the costs accrued during the project
implementation are likely to be generated by the supplier. To this end the customer's project code or
description should be incorporated and presented as part of those invoices to which they relate. It is
therefore a requirement that new specific features of the supplier's billing system need to be developed,
indeed for service organisations their billing system must be seen as a strategic IT system. Currently
the reverse of this is almost always the case. In fact, organisations tend to see billing as a service that
can be out-sourced, or secured via a packaged approach. Those organisations that want to lead in the
provision of soft service should modify their billing system to provide them with a competitive edge.
Subsequently the supplier should be able to provide a data-file or report detailing all project related
invoices with an associated analysis of costs into specific categories. This should span the whole
project from beginning to end. Intermediate reports should be available on request.
Dissemination of information internally within an organisation is notoriously inadequate. This is
invariably worse in relation to business change. In this area the benefits of web based technologies
should be considered and brought into the suppliers service offering. The simple solution is to
implement a project-related newsgroup that can be accessed by the customer's own end-users and
supplier's internal staff. Typically this should be a service hosted by the supplier using its own servers
or their ISP. The customer's end-users would gain access over the Internet, probably via an HTML link
provided on the companies Intranet. Not only would this provide information to customer staff on the
time scales that might affect them, but also enable them to post questions about the technologies being
implemented. It could also be used to gain qualitative feedback from early adopters in the project.
Since it would be web based, it can be accessed by anyone from any location at any time, and be up to
date – something of a break through. The project manager should moderate the news group.
2. Change Management
This layer of service is rarely provided by suppliers, often due to the fact that historically it has been
provided by the customer’s own internal staff, since these staff may now not be available, it must be
provided by the supplier. The facets of service that need to be addressed by any supplier in this area
are:
• Asset Management
• Hardware relocation
• End user churn

8. • Technical Implementation
• Asset labelling
• Web based feedback
Features that map onto these services can usually be provided by comprehensive databases which detail
the equipment under cover, linked to the end user of that equipment. A typical example might be PC’s
in an office block. The service provider would tag all equipment by asset no., and locate it by floor and
desk, and then by user. The service would provide for the moves of staff within the building and staff
churn as employees leave to be replaced by others. Technical support would be required to link
equipment into any local network.
Once the database, which describes the equipment and its location, has been built, there then follows
the difficult problem of its maintenance such that at any time it is known to be correct. The best
solution to this problem is to provide for the database to be accessible via a browser, possibly using cgi
based forms or downloadable applet. This then allows the end user to check what information is held
about their equipment and then directly advise the supplier of any change in configuration, location or
use of the equipment. Particular features can be provided that provide for the end user to request
relocation for single items or even a complete department.
These techniques can be used to ensure the problems of churn are kept to a minimum and that the
information is accurate. This is of key importance when considering the fact that the database is
probably used as a basis for internal cost distribution.
It can be seen that this area of soft service would provide internal cost savings for the customer.
The account manager should set out to value these savings and then attribute them as a valued ‘add on’
benefit to the suppliers service. In the case of PC’s such valuations are often available from
organisations such as the Gartner Group who have already calculated the TCO (Total Cost of
Ownership) for PC equipment.
3. End User Support
This area of soft service is well understood and often implemented as an external helpdesk service for
the customer's own end users. The facets of service that need to be addressed by a supplier in this area
are:
• Dedicated telephone number
• Shared database of users and equipment
• Call Telephony Integration
• Call Centre technology
• Layered operative skills
• FAQ (Frequently Asked Questions) server
Often the quality of service provided by an external helpdesk is of a mediocre nature. This is usually
because the planning effort by the supplier prior to commencement of the service is inadequate. For
example a dedicated telephone number should be provided for the customers end-users (ideally
advertised on the asset labels), which combined with Call Telephony Integration can be use to identify
the end user's company immediately upon receipt of the call. The end user can then receive a
personalised response and the correct database entries are more easily identified leading to a faster
identification of the problem and a quicker problem resolution. Digital telephone lines utilising
Direct-Dial-In (DDI) are the most effective, where a specific number can be used to delineate between
divisions or sites within the customers organisation.
The helpdesk telephone system should be managed using call centre technology providing real time
views of call queues and hourly statistics. This can be used to ensure that call queues are kept to a
minimum. Most importantly, the call response times for the customer's specific number can be
analysed and reported upon to the buyer, thereby providing a very focused view of the service
experienced by the buyer's own end users. Typically all help desks view callers as a single ‘pool’ of
end users and so are only able to provide general statistics covering all customers of the service. This
obviously prevents the provider from differentiating its service level from one customer to another.
Clearly some customers would want to pay more and provide a higher level of service to its internal

9. users. Not only does a dedicated number provide for this capability, it also enables the supplier to
mimic the level of service that would most likely have been provided by an internal department. Indeed
the caller may not be aware that the service is external to the organisation if it is well implemented. The
reverse is typically the case, which often leads to complaints made by the end user direct to the buyer.
Under these circumstances monthly statistical reports should be provide to the buyer to counter the bad
impression created by those few user who experience a poor service. These reports should be published
on the organisation's Intranet.
This help desk service should be backed up by a detailed database of the customer's end users, which
obviously should be well maintained. Customer key codes should be held in the database so that the
end user can report information in their own format, e.g.:
‘Q: what is your location?’,
‘A: site code xxxxx’,
Here the site code is the customer's own number and not that used by the supplier. Very often suppliers
assign their own data codes or keys to their customer's estate. These are designed to suit the suppliers
computerised systems. The designers of such systems invariably do not allow keyed retrieval features
that can accommodate codes understood by the customer themselves. When this facility is available
then the customer's own estate codes can be entered into the database. Callers do not then have to know
the supplier's own codes prior to making the call (such as contract numbers). This is another feature
that mimics the internal service that would have been provided and further reinforces the impression
that the external service is in fact internal. All calls should be logged and a call no. given out to the
user, a computerised diary system should also be implemented such that subsequent repeat calls by the
same user on the same subject can be linked and traced back to the original operative.
When layered operative skills are implemented then second level support can be provided either by the
supplier's own technical experts, or if required by the customers own remaining technical support staff.
These people would normally be located separately at the customer's own technical centre. If the help
desk is utilising digital lines, then the caller can be put on hold and the call directly transferred
externally, thus eliminating the response of ‘call another number’.
If the help desk database system has been browser enabled, then second level support, when provided
by the customer's own staff, can have direct access to the information keyed by the first level across the
Internet. This provides a fully integrated solution and excellent service for the end user.
Finally the implementation of a frequently asked questions area of the suppliers web server can be
provided to aid end user support. This can be of most use in providing the users with background
information to the service that has been purchased for them, such as the detail of the service level
agreement surrounding the contract. Thereby the expectations of the users can be modified such that
complaints are only made when the service levels fall below the agreed standard, rather than, as is most
often the case, when the service is not what the user would prefer.
These techniques when well utilised can mimic the service levels that would have previously been
experienced by the end user when calling their own internal support staff. This important aspect is
often overlooked which leads to complaints from end users (to the buyer) about the quality of service
from the external helpdesk. These complaints do not refer to the knowledge level of the operatives, but
instead, to the experience of dealing with a helpdesk that does not know anything about them as an
individual in a particular organisation, or the myriad people they have to ring to get a problem resolved.
By using the advanced techniques described linked with creative use of web technology these service
level problems can be resolved.
4. Flexible Contracts
This area of service is important when considering how all organisations are facing an increasing pace
of change leading to constant alterations in the customer’s internal structures and staff. This can range
from a simple reorganisation to changes in the number of units covered by the contract.

10. Typically service contracts have historically been drawn up based upon a concept of fixed numbers of
devices for a fixed term, so a facilities managed style of contract, covering PC’s, might specify 200
items for a 3 year period. In this respect FM (Facilities Managed) contracts have become an inflexible
method of service provision for the following reasons.
• The buyer has to have a high level of confidence in the supplier to sign a long contract.
• Multiple tenders must be examined to ensure the correct supplier is chosen.
• Exacting contracts have to be drawn up to cover all aspects of service.
• The process of supplier selection is long and drawn out.
• Service requirements can change before the contract becomes effective.
• Usually the customer’s internal staff has to be completely replaced or bought out.
• It is a strategic one way ticket, once lost the internal capability is hard to replace.
Therefore a supplier who can provide a flexible approach using enhanced soft services integrated with
a residual internal team can remove all the obstacles to externalisation of the operation and ease
supplier choice. This typically leads to a contract covering a one-year period, which, if possible, should
be aligned with the financial year of the purchasing organisation. The scope of service should be
variable in terms of deliverables and the number of units, and is best defined by regular meetings with
the support teams of both organisations. These meetings should be held regularly and include the buyer
and account manager of each organisation. The minutes of these meetings can then be used to form the
basis of the service level agreement and hence the contract. The minutes should be agreed and signed
by each party, thereby leading to a contract which varies over time to suit the customer. The account
manager must be able to agree to changes in the supplier's service provision and thereafter ensure this
service is delivered. These contracts can be implemented very quickly and can accommodate changes
that affect the customer over time. Since the nature of this type of contract is low in risk then it
becomes easier for the buyer to enter into.
5. Billing, and 6. Cost Distribution
This area of soft service is almost always completely ignored by suppliers and yet it is most crucial in
two key areas. Firstly it directly impinges upon the time of the buyer, and secondly it can show a large
saving in the total cost of service provided by the supplier.
The facets of service that need to be provided by the supplier in this area are: -
• Single monthly, Quarterly or Yearly bill
• Single bill which aggregates all associated costs.
• Bill submitted on computerised disk.
• Bill identifies costs according to customer’s own codes.
• Bill is easily understood and easy to check
• Backed by billing support staff
• Billing errors are quickly agreed and corrected by credits.
Almost always the suppliers billing system has been designed by accountants from the viewpoint of the
supplier. Bills usually describe the charges according to the suppliers understanding of the service, and
show the suppliers own codes in relation to that service. A good example of this might be a charge for
telephone calls. The bill will show the telephone number, the customer name and an address for the
location. Typically telephone-billing systems have been designed with the public in mind, and have no
concept of corporations or divisions of large organisations.
Ideally the bill needs a customer-specified tag line which can be printed on the bill to enable the
customers own staff to easily recognise the site. It should also contain the customer's own reference
code for the site, usually the accountant’s ledger code, this is likely to be structured and thereby
identify the location and division of the corporation. These additional database fields should be
requested during the service provision process. Thereafter the billing system should be able to produce
analysis using the customer codes provided, to distribute costs by site and division. It should also be
able to retrieve transactions by the customer’s own code, rather than the telephone number. This
facility can then be utilised by the supplier when dealing with telephone enquiries from any customer

11. employee. Instead of asking for their account number or contract number, (which may not be known
by the caller) they can be requested to provide reference numbers typically used by the company to
describe its own estate.
Once the suppliers billing system has been modified to hold customer reference codes then these data
fields need to be populated and thereafter accurately maintained. The most appropriate solution is to
provide a browser-enabled interface which can then be accessed by the customer's own employees via
the Internet. The account manager and buyer would agree on a regular maintenance policy covering the
initial data population followed by any required changes during the period of the contract. The service
level agreement should specify who is responsible for the accuracy of the information. There will
invariably be a number of the customer's internal departments spread across multiple locations and staff
levels. Obviously appropriate security measures such as secure sessions and data encryption should be
employed to protect the information of the company. It can be seen that this level of supplier/customer
integration is initially difficult to achieve, but the future benefits that can be gained are of enormous
value, and can be summarised as follows:
• cost reductions internal to the customer, provided by simplified procedures and processes
• revenue cost reductions in the supplier, enabled by fewer first level support staff
• long term customer relationship that is not price sensitive
• very difficult for alternate suppliers to take over the contract (since they do not have the data)
• significant cost savings via a reduction in internal transactional cost processes
Once these data items are in place then the supplier should ensure their billing system is designed such
that it can provide regular bills that simplify both the payment process and the internal cost distribution
of the customer. This is achieved by providing a single bill that aggregates all the costs into one total
figure, which is passed and then processed by accounts payable. In addition the supplier provides an
analysis file which is based upon the structured reference codes provided by the customer which maps
directly into the nominal ledger files used by the accountants of the customer for cost distribution
within the organisation. The cost analysis file should be provided by electronic means, either as a
comma-delimited data file or a spreadsheet (usually defined by the customer accounts dept.).
Finally similar data comprising any detailed itemisation should be output into HTML format and
provided for the customer so as to be included onto the company intranet. This can then be used as a
historic reference and also by the various cost centre managers of the customer to check the break
down of the costs that they have been allocated by the internal cost distribution system.
The following example is based upon an actual case study where the supplier set out to win a new
contract using soft service principles. It is a good example of how soft service can reduce the total cost
of provision. All savings were made in the area of transactional processes covering billing and cost
distribution, both within the customer and supplier, enabling the supplier to reduce direct cost.
Example
The customer was a medium sized corporation utilising 250 fax machines sited across 100 locations.
Historically the fax machines had been purchased by the local manager with a variety of maintenance
contracts provisioned. The estate comprised models from various manufacturers, these were being
maintained by approximately 30 different suppliers with an average yearly maintenance cost of 300
dollars per fax machine. A large variety of consumables were being locally purchased.
The historic cost profile was as follows –
1. 200 machines @ 300 / year maintenance cost, total 60,000 dollars (external)
2. 30 suppliers @ 400 / year internal ledger cost, total 12,000 dollars (internal)
3. 300 maintenance invoices / year @ 50 to process, total 15,000 dollars (internal)
4. internal manual cost distribution by accounts dept., total 500 dollars (internal)
5. Total cost of service provision / year - 87,500 dollars.
The new supplier proposed a single source contract covering all consumables, new provision, and a
single yearly invoice covering maintenance. Since their own administration costs would be lower they
passed on savings in the yearly maintenance cost, as follows –

12. 1. 200 machines @ 100 / year maintenance cost, total 20,000 dollars (external)
2. 1 supplier @ 400 / year internal ledger cost, total 400 dollars (internal)
3. 1 maintenance invoice / year @ 50 to process, total 50 dollars (internal)
4. 1 ledger import cost distribution data file, saving 500 dollars / year (internal)
5. Total cost of service provision / year – 19,950 dollars.
The set up costs included the creation of a database describing the customer's estate and the cost of
changing the internal procedures of the organisation to place all support calls and consumable orders
with the new single supplier. This included adhesive labels to be applied to all equipment and a supply
contract that provided for all consumables to be ordered by a faxed form rather than a purchase order,
providing further internal transaction cost savings.
7. Web based data maintenance & feedback
Techniques applied in this area have already been described in previous sections of this document but
can be summarised as follows.
To enable the supplier to reduce the internal costs of the customer, the supplier’s own computer
systems need to be modified such that they are able to hold data items that are unique to the customer.
Typically these will be reference codes that the customer uses to describe their own estate, i.e. that map
directly to key codes held within their own computer systems, or are commonly used by the customers
staff when describing its self. At present most enterprise computer systems take the supplier outward
view of the customer and therefore do not allow for the inclusion of data items that are not used or
mean nothing in terms of its own internal processing procedures. The usage of these data items would
vary from one customer to another, should comprise approximately 6 distinct fields, and should be
enabled with the following standard processing attributes as follows:
• Be capable of creation and maintenance via a browser based remote terminal
• Be traceable in terms of ‘last modified on date, by customer user name’
• Be classified according to usage, such as billing, reporting, end user support, and etceteras.
• Be accessible by the suppliers own staff as a keyed entry point to the database
• Be output by the billing system as selectable reference codes
• Be accessible as selectable fields for management reporting
The whole concept should be that these data items are the responsibility of the customer and that the
supplier provides secure access for the purposes of creation and maintenance. Customer staff should
access the supplier system via the Internet utilising secure and encrypted sessions. The application of
an Internet based VPN (Virtual Private Network) should be considered where appropriate.
Since the supplier now has customer staff from the middle layers of the organisation in direct contact
with their web service, the opportunity to act as a portal for other services should not be overlooked,
these could take the form of:
• an FAQ section which describes the supplier service and its operation in respect of the customer
• an FAQ ‘Before Ringing for Service’ section which should prevent erroneous call outs
• a FEEDBACK questionnaire soliciting opinions of the supplier service
• an NEW PROVISION ordering facility (if agreed as part of the contract)
• a TRAINING module which comprises the equipment operating manual
• a request for CONSUMABLES facility
• a DELIVERY TRACKING facility to ascertain the likely arrival time for ordered goods
• a FAULT LOGGING facility for customer technical support staff
• an ENGINEER ETA facility to support the call out process
Most of these web-based facilities would reduce the suppliers cost of operation and improve the quality
of service for the customer.

13. The first part of supplier/customer integration has been described above as the collection of unique
customer data within the supplier's operational database. This now enables the second part of the
service, which again facilitates internal cost reductions for the customer. This is enabled by the
provision of transactional information for the customer, usually for the purposes of checking that the
service has actually been supplied or as a means whereby cost centre managers can identify how their
total cost is made up, allowing them to reduce inappropriate usage. A typical example of this might be
the itemised transactions shown on the telephone bill. This information is totally ignored by the
accounts department where the bill is processed, but very useful to the manager of the location that
generates the cost. The bill for payment should be provided (as described in section 7) leaving the
itemised transactional information to be supplied as an HTML formatted file. This file can be sent as an
email or if large via FTP to the technical support staff of the customer who can then make it available
upon their own Intranet. It may then be accessed directly by any member of the organisation, from desk
clerk to regional manager. Since all staff would be aware that telephone usage was easily monitored, a
natural suppression of misuse would result. Another example might be a monthly file describing all
consumables purchased across the organisation, each transaction would be associated with its
appropriate reference codes input by the customer using the web interface. Thereafter the management
of the customer would be able to analyse the purchasing styles across the organisation comparing levels
of usage and making appropriate changes as required. Thus this aspect of soft service allows the
managers of the customer to control the costs of supply, initially this appears to be contrary to the
interests of the supplier in that it will lead to a reduction in the value of the contract. However, since
the overall savings for the customer are high then the unitary cost of provision becomes less important
leading to a higher margin for the supplier.
8. Management reports
This area of soft service can be used directly by the account manager when reviewing the quality of the
provision with the contract buyer. It should focus on aspects of the actual service as experienced by the
internal users of the customer. Key measures should be reviewed monthly, these will vary according to
the type of contract but might cover:
• number of requests for engineering call out
• first time fix, time to site , down time
• repeated site or user calls
• calls to the helpdesk
• time to answer
• consumable deliveries and time to receipt
• classification of fault types
Where possible these should all be expressed as a percentage of the service level agreement, any
provision that fell outside of the SLA should be reported in detail. This provides the buyer with all the
relevant information so as to be fully conversant with the facts when the internal recipient of the failed
service raises the inevitable complaint about the supplier. At this point the ability to be able to put the
failure into context of the overall service is very important. Following the monthly review where the
reports are reviewed, they should be published on the companies Intranet for all to see and comment
upon.
Summary
It was seen that improved levels of soft service can lead to internal cost reductions for the customer.
Less obvious is the reduction of the customer's need to develop purchasing analysis systems, or even
high volume purchase ordering and payment systems. Thus as the structural profile of the organisation
flattens out so the IT system needs to follow suite. Conceptually the internal cost of IT system
provision and operation is being exported to the supplier. This in fact comprises one of the largest cost
savings for the customer. Hence the importance of the account manager taking a holistic view of
service provision and costing the total cost of service during the bid process. Thus the integration of
supplier and customer, becomes bound together by the IT layer and soft services surrounding the
product supplied, actually provide the real value of the contract.

14. It should be realised that all the advantages accrue to the supplier over the long term (as the initial costs
depreciate) and that the directors of the customer have taken an invisible strategic decision, in that, by
creating a flatter organisation they have also made the company ‘supplier bound’. This is due to the
investment in time and resources needed to create the level of integration described and thereafter the
difficulty of the organisation in replacing the supplier due the cost, time and effort that would be
required to jump from one supplier to another. A new phenomenon is thereby developing which might
be described as supply chain inertia, whereby large organisations that need new types of soft services
eventually become locked into a fixed supply base. Whilst that supply base can provide the flexibility
required by the corporation in the changing market then all will be well.
It is obvious that as long as the supplier continues to provide a good quality of service that the
relationship will continue. In fact, once established a supplier can only lose the contract, since it is not
in the interest of the customer to expend the cost involved in change for no good reason. The supplier
account manager should have a record of the cost involved during the original effort required to create
the contract, which can then be set against any lower unitary cost put forward by an alternative supplier
being considered by the customer. In short, soft services enable the sale of product and services to
corporations as they restructure the organisation to adjust to lower margins created by new markets.